|Recommended Broker 🇰🇪||
|🌐 Official website:||
* Your capital is at risk.
How to buy
For those who live in Kenya, the best way to invest in Xpeng 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 Kenya, 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: 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.
How to make your first trade
When eToro has confirmed the receipt of your credit, you just have to search for “Xpeng” 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.
Xpeng business model
Xpeng is a Chinese company dedicated to the manufacture of high-end electric vehicles. It was founded in 2015 by Xia Heng and He tao, together with two important partners who believed in the project: He Xiaopeng, former executive of Alibaba and Lei Jun, founder of Xiaomi.
This company, also known as Xiaopeng Motors, decided to enter the competitive electric vehicle segment, a sector dominated by Tesla and where NIO already existed in China. However, despite also being luxury vehicles, Xpeng has differentiated itself because its main objective is to provide comfort in its vehicles, beyond speed.
The company currently offers two vehicle models, the G3 and the P7. In the case of the G3, it is an SUV that began marketing in 2018 (although its foundation was in 2015). While the P7, a very comfortable sedan, they brought it to market in 2020.
Its IPO was on August 27, 2020, so there is no historical information about its performance as can be found from other companies. But at the time of its IPO, in the company's prospectus, it notified that by July 2020 it had sold 18,741 units of the G3 and 1966 units of the P7.
These are obviously quite small numbers when compared to other companies in the same sector. In fact, although Xpeng is listed on the New York Stock Exchange, it only markets its vehicles in China because as we mentioned, it is a small company.
An important detail is that when reviewing the company's financial reports (you can find them on its official website) we find that the company since its foundation has generated losses.
The year 2020 has been the only year in which sales have exceeded the cost of sales generating 40 million dollars of profit. However, this figure is only about sales because when operating expenses (research and development, administrative and general expenses) are added in, Xpeng has a net loss of $418 million. And it was their best year ever.
Straight up we recommend you look at other established companies like Tesla if you are interested in investing in the electric vehicle sector. Because at the end of the day, if all you are offering is the potential going forward, you are not offering anything that Tesla or NIO does not.
Is eToro reliable for purchasing Xpeng?
eToro is very careful with the data about past performances from users, and its reliability has been tested once and again by independent organizations.
Legally, eToro follows all the demanding regulations of the European Union, legislation in which it is found. Specifically, its main offices are in Cyprus, and it is approved by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 of the debts from its clients, including those from Kenya.
It is also backed by the European Financial Instruments Market (MiFID), and in the USA it responds to the Financial Conduct Authority (FCA). Besides all these regulations, eToro has been active for fifteen years, with more than 20 million users around the world, so we can rest assured that our money is safe.
Finally, their excellent customer service is also worth mentioning. You can contact them by phone or use their live chat.
How to deposit funds into your eToro account
Within the payment methods accepted on eToro you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is a very easy process. You just have to click “Deposit funds”, type the amount and choose a payment method from the previous ones.
(Consider that you should be the account or credit card holder, for security policies).
The minimum you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified, so if you plan to operate with larger sums, contact Support beforehand to verify your account.
Also, remember that you can make the transfer in any currency because eToro defaults all deposits to USD, but charges a commission for it, so it is better to make the transfer directly in USD.
How do Contracts for Difference work?
If you browsed eToro previously, you must have seen how the acronym CFD appears frequently. We will explain its meaning now, but first, you should know that cryptocurrency operations on eToro are only CFDs if you are short-selling.
In case you are thinking about day trading cryptocurrency or other trading practices, you will also find concepts like going short and leverage.
With CFDs you can operate on eToro even if you are not “in the black” or having a negative balance. In a hypothetical case: you believe that the Xpeng will go down, so the logical thing is to think “if it is going to depreciate (go down in price), I'll just wait until it does and then I'll bet”. However, if it really falls, it might mean extra money for you.
You can do that by “going short”. Basically, it functions like this:
- You ask someone to lend you, for instance, 100 units of Xpeng, which total price at that moment is $ 5,000 (obviously, these numbers aren't real)
- You make $ 5,000 by selling the 100 units
- The Xpeng devaluates from $ 50 to $ 30
- Again, you purchase the 100 units, but at the current price, $ 3,000
- You return the 100 units to whom made the loan
- The difference is yours, so, you will have earned $ 2000
Keep in mind that it is much easier than it sounds: we can summarize this whole operation by saying that by trading in Xpeng you can also earn money if you foretell the downs.
How does leverage work
If you are not familiar with the term “leverage”, we'll put it short: it is, simply, the possibility to use a higher amount than you actually have. That way, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Assuming that, for instance, you are certain that Xpeng price is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and make more money.
You could consider asking for a loan, but it is a process that takes time, and when you receive the money, Xpeng might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is like a credit, and you will only have to click a few times! You will be able to operate with much more than what you have on the platform's wallet. It is very simple, before investing you will see the different options as in the screenshot:
With other assets, the ability to leverage is greater. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used mostly for short-term operations or day trading. Let's talk a bit more about how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 are a “loan” from eToro).
- Then, turns out that Xpeng price does rises, as you thought, and now the price of your investment is $ 2,400 (20% more), so you decide to sell back because you want to play it safe.
- Once the $1,000 from leverage is deducted, you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
Does it sound too good? The trick is that the risk of losing out also increases. If everything goes according to plan and the price goes up, you will make more money in less time; however, if the value of the asset goes down, you will also lose more in less time.
Let's say that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. Because of that, the terms “Take Profit” and “Stop Loss” are crucial when operating with leverage.
Take Profit is the automatic order to sell once the asset is above the entry price: you buy Xpeng shares at $ 100 and you ask eToro to automatically close your position as soon as the price reaches $ 120. It is very useful to avoid being blinded by greed: we would all take a 20% profit when making the investment, but when you reach that 20% it is easy to ask yourself “what if this keeps increasing and I can earn even more?”. It's like you got assured in advance of not doing anything dumb in the future.
Stop Loss is even more necessary, particularly if you trade with leverage, because a reduced loss with leverage can be tragic for your wallet. For that reason, it is essential to set a Stop Loss more tight than that suggested by the broker.
What assets can you trade in eToro?
We already know about stocks, there are way more financial instruments available in eToro.
ETFs or Exchange-Traded Funds are a type of passively managed fund, similar to index funds. We can say that ETFs are halfway between stocks and funds: they are publicly traded and therefore can be commercialized at any moment at market price. However, their advantage is that they are more diversified compared to stocks, and their fees are much lower than those of an actively managed fund.
Forex or currency trading is the exchange between two currencies in order to obtain a profit through the operation.
If you decide to trade euros and dollars, for example, you acquire euros at their price in dollars, with the expectation that the euro will raise its price compared to the dollar. Therefore, if you bought each euro for 1.15 USD and you sell them back when they are worth 1.20 USD, you'll be earning that margin.
You may be thinking by now that trading with currencies requires investing considerable amounts, and that is correct, since variations are usually minimal, and often you will need to use a lot of leverage (which sometimes can be too much of a risk). Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is not the safest.
Most currencies are available on eToro but remember that this market functions with CFDs, so the underlying asset won't be yours.
Commodities or raw materials
Most people invest in raw materials due to their stability. While other assets present higher fluctuation, commodity prices vary less and offer safety against inflation or market volatility. However, prices do depend on supply and demand, so if the fear of possible inflation provokes greater demand for a certain good, its cost will also go up.
Take into account that commodities don't pay dividends. Therefore, by investing in them you will only have a further profit by selling them back.
There are two main kinds of commodities: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; while the latter are agricultural goods, such as cocoa, soybeans, rice, or sugar.
Demo account: How does it work?
In case you do not have much experience investing, you can start by practicing with a “demo” option. You only need to set the “virtual” option and your operations will be carried out with “imaginary” funds.
A virtual account can be a good way of practicing before starting to operate with real funds. When you create your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of assets available on the platform (not just with Xpeng).
The first attempt is not usually that good. But you can ask eToro to replenish the virtual funds to your portfolio, and the second try you should do better.
Keep in mind that you should always be cold-minded when investing, and using a virtual portfolio might have the opposite effect. It is not the same to operate with your own money than with virtual funds, which you can lose without any consequences.
As you may suppose, the virtual mode is kind of pointless if you intend to invest in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years. Demo 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.