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How to buy
For those who live in Ireland, the best way to invest in Spotify shares is, definitely, this popular broker.
eToro*, one of the main brokers around the world, is registered and licensed, among others, by the United Kingdom's Financial Conduct Authority (FCA).
We recommend eToro because you can create an account for free with this broker, and its fees for trading online are very low. Besides, eToro is available in our language, accepts users from Ireland, it is really easy to manage, and its friendly interface is ideal for those who are starting to trade with cryptocurrencies and stocks.
How to sign up, step by step
The first thing you need to do is click here and fill in the fields on the right: enter your name, email, and set a password.
Now check your email inbox: you should have received an email from eToro, click on “Verify my email” and your account will be verified.
Once on eToro, you just have to click on “Deposit funds”, in the page menu.
There, you can choose how much money you want to add to your account (the minimum is $ 200) and the payment method:
As you can see in the image, the first deposit can be made by credit card, PayPal, or bank transfer.
If you have a choice, we do not recommend bank transfer because it takes longer, and it can be very frustrating to see the price of Spotify rising while you wait for your transfer to be done.
How to make your first trade
As soon as eToro has confirmed the receipt of your credit, you just have to search for “Spotify” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.
*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Spotify Technology is a Swedish company whose product is the well-known music player application that bears the same name of the company: Spotify. Launched in 2008, the application has become one of the most widely used, accumulating more than 340 million users worldwide.
From the beginning, Spotify was presented as a multiplatform application that was available for Windows, Mac Os, Linux, Symbian, IOS and Android. With this, Spotify was guaranteed a fast diffusion among music lovers as they could have the application always with them, both on computers and cell phones.
Spotify offers its users more than 35 million song titles that they can listen to as on the radio via streaming. And it also offers users the possibility of using the application for free or subscribing to the premium service.
The difference is that the free accounts have some limitations, in addition to having advertising between songs. Unlike the premium ones that do not have any limitations or advertising.
In this way, Spotify generates money with both types of account because with the free account it obtains income from advertising while with the premium accounts it obtains income from subscriptions. Being the subscriptions its main business and major source of income as it has more than 155 million users who pay the subscription.
In its business model, the company keeps 30% of the revenues while the remaining 70% is distributed among the artists. This is based on a formula that distributes the money in relation to the number of plays accumulated by each singer.
It went public only on April 3, 2018, so its history listed on the New York Stock Exchange is quite short. However, this has come to offer a return of more than 200% between highs and lows making it an ideal stock for those who know how to take advantage of volatility.
In general, Spotify is a company with a great future given the segment to which it is dedicated, music. This is a sector that grows and adapts on its own and Spotify is only the medium through which it is disseminated, remaining completely outside of what happens in the music industry. And although so far it does not pay dividends, it is not ruled out that in the future it will do so.
About Contracts for Difference
You probably have found the term CFD now and then if you entered eToro before. We will explain its meaning now, but first, you should know that CFDs on eToro are only possible when you short sell or leverage over x2 (but this is not even an option on the platform).
We will also explain terms like leverage and “going short”, in case you are interested in day trading cryptocurrency or other more advanced practices.
With CFDs you can bet on the platform even if you are “in red” or don't have a positive balance. Let's say that you have the certitude that the Spotify will fall, so probably you think that it is better to wait until it does and then go in. Nevertheless, if you are convinced that it is going down, why not take advantage of that and making money?
You can accomplish that by “going short”. Here's how it works ,roughly:
- You ask someone for a loan of, let's say, 100 units of Spotify, which total value at that moment is $ 5,000 (obviously, these figures are made imaginary)
- You sell the 100 units and earn $ 5,000
- The Spotify devaluates from $ 50 to $ 30
- You buy all 100 units once again, but now they are worth $ 3,000
- You return the 100 units
- The rest is yours, so, you will have made $ 2000
Keep in mind that it seems much more tricky than it really is: we can summarize this whole operation by saying that by trading in Spotify you can also make money if you predict the downs.
There are different methods or ways for crypto trading, such as buying and holding or day trading, for naming just a couple.
My recommendation for those who are beginning to invest is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.
For example, if you purchase a cryptocurrency at $ 15, then it rises up to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will obtain a good profit.
I know it's tempting to look to sell when the cost is at its peak, but that is simply not possible. The above method is much more down-to-earth and, well applied, it can work very well.
And when you have more experience, you will be ready for more advanced trading strategies, such as using leverage or going short.
How does a virtual portfolio work?
For those who still don't have much experience in investing, a demo account can be very helpful. You just need to set the virtual mode and you can start trading with fictional funds.
This is a great tool for those who want to put their talents to the test before playing for real money. When you create your account, you will start with $ 100,000 of virtual funds to do your trades, not only with Spotify, but you can also create a diverse portfolio.
The first attempt is not usually that good. But you can ask eToro to replenish the virtual funds to your account.
Nevertheless, keep in mind that investing is mostly about being cold-minded, and using a demo account can have an adverse effect. It is completely different to risk your real savings than to trade with a fake balance which loss does not suppose any drama.
Finally, the virtual mode is kind of absurd if you want to invest in the medium or long-term, since you would be wasting years. Virtual accounts may be helpful for practicing before investing in the short or medium-term.
Frequently asked questions
* Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.