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How to buy
For those who live in Kenya, a great way to invest in Zoom shares is, without any doubt, 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 your 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.
Then check your email inbox: you 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 Zoom rising while you wait for your transfer to be done.
How to make your first purchase
When eToro has confirmed the receipt of your credit, you just have to search for “Zoom” 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.
What does Zoom do?
Zoom Video Communications, the company behind Zoom video conferencing software, is an American company founded in 2011 by Eric Yuan. And although it has been embroiled in many controversies over security issues, Zoom has seen impressive growth.
Yuan's idea was to develop software that would allow people to see each other regardless of distance and without the need to travel. It was this idea that gave rise to Zoom, although it was not really something new because, at the time, several companies were already offering the service.
However, Zoom was more popular than any other, mainly due to its ease of use and the fact that it was free of charge. Thus, in the midst of the technological revolution represented by smartphones, Zoom offered its software free of charge for computers, laptops, tablets and smartphones.
Zoom's business model
As you may already know, Zoom is still free, you can download the program, install it and use it without paying anything. But then the question arises, how does Zoom make money? And the answer is very simple: with subscriptions to a “premium” version.
Zoom has been involved in several controversies regarding the security of the application since the free version does not secure the data. And although the company has publicly apologized for this, the reality is that this is where its business model lies.
Basically, if you use it for free, your video calls are not encrypted, the room is unprotected and the data does not travel directly between participants. The latter is the most controversial because part of the Zoom communications go through Chinese servers where, by law, the government has the right to record the data.
But, if you use the paid version, all problems are magically solved. Your video conferences are private, the data is encrypted and travels from one person to another directly without anyone being able to “read” it. It's that simple how they make money.
And despite this controversy, Zoom has emerged victorious as since its IPO in April 2019 this company has not stopped growing while others disappear. And we are not only referring to the financial market, but also to its growth in the number of users which in the long run means higher revenues and a better valuation of this company.
eToro, our recommended platform for investing in Zoom from Kenya?
- It's uncomplicated and easy to use
- Allows to learn from other investment strategies
- Allows you to go short
- You can trade leveraged
- There are lots of investment options
Homepage: www.etoro.com *
You should consider eToro in case you are thinking about investing in Zoom from Kenya.
“Social trading”, a relatively new investment method that consists in replicating techniques and moves from other experienced investors, has become popular thanks to eToro.
eToro is very useful if you don't have much experience in trading. You can rest assured that you are doing a smart investment move when replicating those from subjects with a great deal of expertise. Also, in case you do have experience in investment, the platform pays you for sharing it with others.
Another advantage is how manageable the platform is, which turns out perfect for new users that are learning all about the trading world.
How do Contracts for Difference function?
You probably have seen the acronym CFD more than once if you already registered on eToro. Before we come back to it, we must say that CFDs on eToro are only possible if you short sell or select leverage higher than x2 (but the platform does not even allow this option).
If you are interested in day trading cryptocurrency and other more advanced operations, we will also refer to terms like going short and leverage.
eToro lets you bet both “in the black” and “in red”. In a hypothetical case: you believe that the Zoom will go down, so perhaps you consider that it is better to refrain from getting in until it does. But if it actually goes down, you can earn some money out of that.
You can accomplish that by “going short”. Here's how it works ,roughly:
- You ask someone to lend you, for instance, 100 units of Zoom, which cost $ 5,000 at the moment (these figures aren't real)
- You sell them at their price on the market, $ 5,000
- The Zoom goes from $ 50 to $ 30 (as you predicted, the price decreases)
- You purchase all 100 units once again, but at the current price, $ 3,000
- Now you return the 100 units to whom made the loan
- The rest is yours, so, you will have made $ 2000
It is far more simple than it may seem. Just remember that by trading in Zoom on eToro, you can make money if you anticipate downs in the price.
Futures Vs CFD
How are CFDs and Futures different?
- Who is the counterparty? With Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- Date of expiry Futures have a determined expiration, while CFDs don’t expire
- Markets available: The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum deposit amount or “trade size”: Being higher numbers, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher, although not too much.
- Use of leverage: with Futures, it isn’t possible; while with CFDs it is.
Trading with leverage
If you still don't know what “leverage” is, we'll describe it briefly: it is, simply, the possibility to use a higher amount than you actually have. That way, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's pretend that you are sure that Zoom will rise, and you consider “going long, but you only have $ 1,000 available. However, it is possible to put more money and earn higher profits.
Possibly, you could ask a financial company for a loan, put something as collateral, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then acquire Zoom… But maybe once you have made all that, your prediction could've been confirmed a long time ago, and Zoom would be already so high that it is not worth trading.
Thanks to leverage, you can obtain that amount of money with two clicks. It's exactly like borrowing money, but much easier and quicker, and with the benefit that you will be getting it directly from eToro. It is very simple, before investing you will see the different options as in the screenshot:
When trading with other assets you can use higher leverage. This is because leverage is most common in short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works.
You enter with $ 1,000 and decide to use leverage x2, then you would really invest $ 2,000 (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A week later Zoom price goes up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Zoom shares. So, a wise decision is to sell them back now.
First of all, the 1k $ of the leverage will be deducted. You have $ 1,400 left, of which $ 1000 was yours initially, so the net profit is $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
It may sound too good to be true. The trick is that the risk of losing out also increases. If everything goes according to plan and the price goes up, you will earn more money in less time; but if the value of the asset goes in the opposite direction, you will also lose more in less time.
Let's suppose that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. That is why the terms “Take Profit” and “Stop Loss” are fundamental when using leverage.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you bought Zoom shares at $ 100, you can ask eToro to close your operation when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps rising, which could make you lose it all.
Stop Loss is even more necessary, especially when operating with leverage, since a small loss could have a significant impact on your wallet. Consider that eToro will recommend a limit for Stop Loss, but it is better to set it closer to current price than that.
What types of assets can you trade in eToro?
Besides criptocurrenciesstocks, there are other financial assets you can trade .
What do you know about Exchange-traded funds? They are similar to index funds and are known for merging the benefits of stocks and mutual funds, because they can be exchanged at any moment in the market, but have much more investment possibilities and the fees are significantly lower.
About Index Funds
If a long-term investment sounds like something you would do, and you won't need to withdraw your money in five or ten years, index funds can be the best choice. This kind of investment is also suitable for beginners since it is safer.
You may have a different idea, but very few fund managers can beat their benchmark return (yes, you have surely heard of managers who obtain huge returns).
But putting aside some unusual cases, not everything is as good as it sounds: if you hear of someone who has beaten the index, they have probably done so for a short period, or will charge you so many commissions that it ends up being better for you to index (whit minimal commissions). Besides, past performances do not ensure a future one.
The great advantage of index funds is that they solve these two issues: their fees are insignificant and they beat active managers almost all the time, although in the long term.
Commodities or raw materials
Most investors trade with raw materials because of their stability. While other assets present higher fluctuation, raw materials prices vary less and offer safety against inflation or market volatility. Nevertheless, prices do depend on supply and demand, so if the fear of possible inflation produces greater demand for a certain good, its cost will also go up.
Keep in mind that the only intended profit from the investment in raw materials will be the hypothetical capital gain after the sale since, unlike shares, these do not distribute dividends or pay interest.
Commodities are commonly categorized into hard raw materials, which include precious metals, industrial metals, and oil; and soft raw materials, which are basically agricultural products, like soy, cocoa, corn, or rice, for instance.
How does eToro work?
We said before that eToro is very friendly and intuitive. Anyone can start using it without having to read endless explanations.
You won't have any issues with the interface if you have used any other social network, like Facebook or Twitter.
Let's talk about the registration process and the different sections of eToro that you should know.
When you register, you will have to enter all the information that eToro asks for: first and last name, address…
To complete your profile, you will have to answer some questions about your experience at investing.
However, it's not like they're testing you or anything. It is only a way of finding out how much knowledge you have and what type of assets they can suggest. For example, if you have never invested before, they will not recommend that you invest in futures.
As soon as you are registered and have completed your profile, the annoying “incomplete profile” bar will disappear.
Let's get to know the different sections of the platform.
“Set Price Alerts” allows you to put alarms on the price of certain assets. This is very useful when you are after a security that is falling, but it seems to you that it will decrease even more.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already talked about the different financial instruments on eToro:
- Exchange-Traded Funds
- Raw materials
- Forex trading
- Index funds
The concept “social trading” comes to life in the section “People”: there, you can duplicate the movements of any user you choose with just one click. You'll be able to see all their profiles and historical performances.
You can search for those investors that best suit your interests: by average earnings, types of instruments or risk level, for example. You just have to type the amount you want to invest and eToro will replicate the movements made by the investor you chose, in proportion. This means that if you have $ 1000 and the trader puts 10% of his or her balance in an asset, the platform will invest also 10% of your funds (that is, $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of individuals is that this way you will diversify the risk. There are all kinds of portfolios that you can find easily and are divided by sectors. Therefore, in case you think a specific industry, such as e-commerce or oil, has good chances to succeed, you can look for that specific portfolio and do your investment.
Do you know what “social trading” is?
The first platform that thought of trading as a social activity was eToro, and the idea spread like wildfire. Other brokers have also taken this concept, but eToro is still the leader.
But it wasn't just about creating yet another social network to talk about investment. The main achievement was in allowing users to copy the moves of experienced traders, and to reward the latter for their ideas and knowledge.
You will find in the left menu of the site the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are a kind of portfolio that bundles a number of assets in a certain sector. For instance, if you think that the gaming industry is going to prosper soon but you don't know which stocks to select, you just have to pick the CopyPortfolio called “InTheGame”, which includes companies like Google, Microsoft, NVIDIA, Nintendo, Logitech…
CopyPortfolio has generated a 100% profit in the last twelve months, and it is as simple as clicking on “Invest”, select the amount, place the stop-loss and wait.
But it is also possible to copy other users of the platform who are successful investors. With “Copy People” you can locate them and imitate their investments easily.
In the profile of each user, you will be able to see their risk profile (how much risk do they take), their performance history, and the type of instruments they trade..
Besides duplicating other investor's moves, which is really interesting and helpful, we also suggest that you make the most out of the community by reading other users. You can learn a lot from their experiences and knowledge, mainly if you aim to make a living from trading.
* 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.