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How to buy
If you live in New Zealand, a great way to invest in Xpeng 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 Australian Securities and Investments Commission (ASIC).
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 New Zealand, 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: 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 Xpeng 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 “Xpeng” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.
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.
How do Contracts for Difference function?
You probably have seen the initials CFD all the time if you already registered on eToro. Before we come back to it, you should know that cryptocurrency trading on the platform is only CFD if you are short-selling or choose leverage higher than x2 (but the platform does not even allow this).
We will also refer to concepts like leverage and “going short”, in case you are considering day trading cryptocurrency or more advanced practices.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. In a hypothetical case: you are sure that the Xpeng will fall, so you clearly think “if it is going to depreciate, I'll just wait until it does”. Nevertheless, if it actually falls, you can earn some money out of that.
You can do that by “going short”. Basically, it functions like this:
- You obtain from a loan 100 units of Xpeng, which cost $ 5,000 (these numbers are fictional)
- You get $ 5,000 by selling them at the market price
- The price is reduced, as you guessed, and the unit of Xpeng now costs $ 30 instead of $ 50
- Again, you purchase the 100 units, but now their value is $ 3,000
- You pay back the 100 units to whoever loaned them to you
- The difference is yours, so, you will have made $ 2000
It is really simple. Just keep in mind that by trading in Xpeng on eToro, with CFDs you can make a profit when you anticipate downs.
Differences between futures and CFDs
What are the main differences between Futures and CFDs?
- Futures: operations are made with another investor or trader.
- CFDs: the operations are not made with someone else, but the counterparty is the brokerage.
- Date of expiration:
- Futures: they have an expiry date. As soon as that moment arrives, the contract is closed even if you are in losses.
- CFDs: on the contrary, they do not have an expiry date. Therefore, you can wait until you get in a good position before closing.
- Trading markets:
- Futures: there are fewer options for investment
- CFDs: they include lots of different assets, commodities and currencies
- Minimum deposit amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can start with a lower trade size
- Trading costs and charges:
- Futures: as you have to invest more, rates are lower
- CFDs: costs are higher
- Possibility of using leverage:
- Futures: you can't leverage
- CFDs: existing and attainable
How to use leverage when trading Xpeng
Have you heard the term “leverage”? Just in case, we'll define it briefly: the good thing about trading is that it lets you invest higher amounts than what you really have. For instance, if you have $ 100 and you choose to leverage x2, you will be really investing $ 200.
What you need to know about leverage
Assuming that, for example, you are sure 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 requesting a credit, 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.
With leverage, you can get that amount of money just by clicking your mouse. It's like a loan, but much better: you will get it from eToro, which allows you to invest a lot more than you have on the platform. As in the image below, you will see the different options you have:
With other assets, you can use more leverage. The reason: cryptocurrencies regularly represent medium-long term investments, and leverage is used especially for short-term operations or day trading. Let's talk a bit more about how leverage works.
You start with $ 1,000 and decide to use leverage x2, which means you would really invest $ 2,000 (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A few days later, as you thought, Xpeng price raises its price by 20% and the value of your investment is now $ 2,400. But you don't want to take too much risk, so it's time to sell.
You will have to pay back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
With $ 1000 you get $ 400, in other words, 40% more. That's not bad at all.
Does it sound too wonderful? 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 profits in little time; but in the opposite case, you will also lose more really quickly.
Supposing that the price didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but $ 40, because of the leverage. For that reason, when using leverage it is very important to know about Take Profit and Stop Loss.
Take Profit is a limit you can set when trading: you set the platform to sell your assets once they get to a point above the entry price. For instance, you can buy Xpeng shares at $ 100 and request that your position is closed automatically when it goes up to $ 120. It is very helpful to avoid being blinded by greed: we would all accept a 20% profit in the beginning, but when you reach that 20% it is easy to want higher profits and put yourself at risk of losing money. It's like you got assured in advance that you will act prudently.
Stop Loss is even more necessary, especially if you use leverage, since a small loss with leverage can have a significant impact on your wallet. Always remember to establish a Stop Loss more tight than that suggested by eToro.
Instruments you can operate with in eToro
Besides criptocurrenciesstocks, there are other financial instruments available in eToro.
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the advantages of stocks and mutual funds: they can be traded at any moment in the market, but have much more diversity and considerably lower rates.
Are suitable for those interested in long-term trading, particularly for beginners. If you don't need an amount of money for the next five or ten years, index funds are a secure option.
Perhaps you have a different idea, but it is very hard to beat the market (yes, you have surely heard of investors who achieve huge profits).
But besides Warren Buffett and a couple more, all that glitters is not gold: when someone brags about having beaten the market, they have probably done so for a short time, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, take into account that past performances do not ensure a future one.
The great advantage of index funds is that they perfectly solve both issues: their commissions are insignificant and they beat active managers almost all the time, although in the long term.
Forex or currency trading allows obtaining profits by exchanging one currency for another.
If you decide to trade EUR and USD, you speculate how many dollars it will take to buy a euro, expecting that the euro will rise compared to the dollar. Therefore, if you purchased each euro at 1.15 USD and you sell them back when their price is 1.20 USD, you'll be keeping that difference.
You may be thinking by now that this form of trading requires high investments, and you're right, since increases in prices are never that dramatic, and often you will need to use high leverage (which is an important risk). In case you are just starting to trade, we don't recommend beginning with this market, because it's not the safest option.
You can exchange with almost all well-known currency pairs on eToro. Still, bear in mind that this market functions with CFDs, thus the underlying asset won't be yours.
How to deposit funds on eToro
Among the payment options that you will find on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. Depositing funds with eToro is so simple: click “Deposit funds”, set an amount and pick the payment method you prefer.
Remember that for security reasons, you need to be the owner of the credit card or the account.
You can start with a $ 200 deposit, and if you are not verified you will have a maximum amount allowed. So, if you intend to operate with much more, you should contact Support to verify your account first.
The platform accepts deposits in any currency, but charges a fee for making the conversion to USD. That is why we recommend, if it is in your hands, depositing in USD from the beginning.
There are different methods or ways for crypto trading, like day trading or buying and holding, for naming just a couple.
In case you are just beginning in the world of investment, I suggest a middle point: when you open your position, set a stop-loss order 15-20% below the maximum price, and let the magic happen.
For example, if you buy a cryptocurrency at $ 15, it rises up to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a fine profit.
Perhaps you are wondering: why not selling when the price is at its peak? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and is much more realistic.
Sooner or later, you will be prepared for using advanced trading strategies, like using leverage or going short.
Practice account: How does it work?
In case you are beginning as an investor, 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.
This option is perfect for those who are new to this world and want to give it a few tries before trading with real funds. When you create your account, you will start with $ 100,000 of virtual balance to do your trades, not only with Xpeng, but you can also work with a diverse portfolio.
The first attempt is not usually that good. But you can ask support to deposit back the virtual funds to your portfolio.
Take into account that trading is mainly about being cautious, and using a virtual account might have the opposite effect. It is not the same to trade with your own money than with fake funds, which you can lose without any consequences.
As you may suppose, the virtual mode is kind of pointless if you want to trade in the medium or long-term, since you would be wasting years. Demo accounts may be ideal for trying out short or medium-term operations.
* 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.