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How to buy
If you live in Philippines, the best way to invest in NIO 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 your language, accepts users from Philippines, 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 the button 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 NIO 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 “NIO” 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.
Is NIO a buy?
NIO is a company founded in China by entrepreneur William Li in 2014 that manufactures and markets high-end electric vehicles. At the time of its launch, this company caught the attention of other large companies that decided to invest in NIO and back it. Among them we can mention Lenovo, Tencent, and large investors such as Sequoia Capital.
Since its founding, NIO has grown so much that it currently has offices in Germany, the United States and the United Kingdom. But one of the most remarkable events was the IPO of its shares on the New York Stock Exchange in 2018, where the value of its shares has revalued up to 500%.
This company seeks to lead the way in the transition from internal combustion vehicles to electric vehicles, thus declaring war on Tesla. This has caused the existence of NIO to be framed within the confrontation between the United States and China.
But it should be clarified that NIO is not the only Chinese company producing electric vehicles. And although its goal is to produce intelligent electric vehicles and autonomous driving, it also has ideas that completely differentiate it from Tesla and the other companies competing in this sector.
What makes NIO stand out from its competitors?
NIO offers high-performance electric vehicles that have a range of more than 600 km. But this is something we can find in other electric vehicles from the Tesla brand.
What does set NIO apart is its charging systems, as the charge can be brought to wherever the vehicle is located. It does this with a van that is capable of providing charging for a range of 100km to two vehicles, and can also recharge Tesla vehicles. So, if a Tesla user does not have a Supercharger nearby, they can call NIO.
In addition, a recharging system that completely sets it apart from the rest is battery swapping. NIO has battery recharging stations where the discharged battery is replaced by a fully charged battery.
All this is done automatically and controlled by robots that carry out the whole process in less than three minutes. So NIO owners really care little or nothing about charging time, thus raising the company's service to a new level.
This service works on a subscription basis that users pay monthly and gives them access to the service. With the advantage of making vehicles cheaper by more than 8 thousand dollars, since users do not have to buy the battery but only subscribe to the service.
Small differences in the business model that in the future could tilt the balance towards NIO's side, making it a company that should always be taken into account.
Instruments you can trade in eToro
We already know about stocks, there are more financial instruments you can trade with .
The main attraction of investing in raw materials is that prices are more stable than those of other assets. In fact, their stability is what makes most people trade with commodities when facing market volatility or inflation. Despite that, the cost of raw materials is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Note that, unlike shares, raw materials don't pay dividends. Thus, the only prospective income would come from a sale of the asset.
Commodities are generally categorized into two kinds: first, we have hard raw materials, which are precious metals (gold, silver, copper, and platinum), industrial metals, and oil; in second place are soft raw materials, which are agricultural goods like sugar, cocoa, soybeans, among others.
Exchange-Traded Funds or ETFs are a type of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and their commissions are much lower than those of an actively managed fund.
This is the best option for people who can invest in the long term, mostly for those who are starting to trade, because it is inexpensive, diversified, and safer.
Contrary to common perception, very few investors can beat their benchmark return (yes, you have surely heard of managers who obtain huge returns).
But besides Warren Buffett and a couple more, not everything is as good as it sounds: when someone brags about having beaten the market, they have probably done so for a short time, or will charge you so many commissions that it ends up being better for you to index (whit minimal commissions). Also, past performances do not ensure a future one.
The great advantage of index funds is that they solve those two issues: their commissions are insignificant and in the long term they tend to beat active managers.
Forex or currency trading is the exchange between two currencies.
If you decide to exchange EUR and USD, for instance, you buy euros at their price in dollars, with the expectation that the euro will increase compared to the dollar. Therefore, if you bought each euro for 1.15 USD and you sell them back when they cost 1.20 USD, you'll be earning that margin.
You may be thinking by now that this form of trading requires investing considerable amounts, and you are not wrong, because increases in prices are never that dramatic, and often you will need to use a lot of leverage (which sometimes can be too much of a risk). Our advice for those starting in the world of trading is to choose another market to begin with, since Forex is not the safest.
The most usual currency pairs are available on eToro. Nevertheless, consider that this market works through CFDs, so the underlying asset won't be yours.
About Contracts for Difference
If you already browsed eToro, you probably noticed that the initials CFD appear repeatedly. We will come back to it, but you should know first that CFDs on eToro are only possible when you are short-selling or choose leverage above x2 (but the platform does not even allow this option).
If you are considering day trading cryptocurrency or other advanced trading operations, you will also find out about concepts like leverage and “going short”.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. For instance, you believe that the NIO will go down, so you obviously think “if it is going to depreciate (go down in price), I'll just wait until it does and then I'll bet”. Nevertheless, if it really goes down, it is possible to 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 NIO, which cost $ 5,000 at the moment (these figures are made up)
- You sell the 100 units at $ 5,000
- As you supposed, the price falls, and the unit of NIO goes from $ 50 to $ 30
- Again, you buy the 100 units, but now their price is $ 3,000
- Then you return the 100 units
- The rest is yours, so, you will have made $ 2000
Consider that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in NIO you can also make money if you predict the downs.
How to deposit funds on eToro
When it comes to depositing money on eToro, there is not much to say, since it is pretty simple. You only need to select “Deposit funds”, put an amount, and choose your payment method. You can pay with PayPal (available for some countries), bank transfer, credit card, Skrill, or Neteller.
(Keep in mind that you should be the account or credit card owner, for security policies).
The lowest amount you can deposit is $ 200, and there is a maximum authorized for unverified accounts. Therefore, in case you want to trade with higher amounts, contact Support beforehand to verify your account.
You can pay in any currency you want and eToro will automatically convert it to USD. However, it is advisable to deposit directly in USD since the platform charges a commission.
We said previously 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 are familiar with any other social network.
Now we are going to walk you through the registration process and the sections of the page that you should familiarize yourself with.
When you open your account, you will have to fill in all the information that eToro asks for: first and last name, address…
To complete your registration, you will have to answer some questions about your experience as an investor.
But don't worry: it is not an exam. It is only a way of finding out how much knowledge you have and what type of assets they can suggest. For example, if it is your first experience in the investment world, they will not recommend that you invest in futures.
Let's review the different functions of the page.
“Set Price Alerts” allows you to set alarms on the price of certain assets. You just have to click on the three points at the end of the line and you will be able to program a price alert. It is a very useful tool for when you are after an asset that is falling, but it seems to you that it has not finished falling yet.
In “News Feed”, traders interact and share valuable information.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we already discussed the kinds of assets on eToro:
- Forex trading
- Index funds
In “People”, you will find eToro users and their historical performance. This is where you can duplicate with just one click the strategies of your preferred traders.
In this section, you can search and find users according to your interests. You can apply filters like risk level, average profits, or financial instruments. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also see the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
The advantage of using CopyPortfolios instead of copying people is that this way you will diversify the risk. There are all kinds of portfolios that you can find easily and are classified by sectors. So, in case you suspect a specific industry, like biotechnology or drones, will prosper in the future, you should probably look for that specific portfolio.
What is social trading?
The first platform that thought of trading as a social activity was eToro, and the idea became popular really quick. Other brokers have also adopted this concept, but eToro is way better.
But it wasn't just about creating yet another social network to talk about investment. The real innovation was in the possibility for users to copy the moves of experienced traders, and to reward the latter for their ideas and knowledge.
When you enter eToro you will find in the menu on the left the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are kinds of exchange-traded funds or thematic index funds, a portfolio that bundles a number of financial assets in a certain sector. For example, if you consider that a particular sector will succeed in the near future but you don't know which stocks to invest in, you just have to select a portfolio that groups together a variety of related companies in that industry.
At the time of writing this text, this CopyPortfolio has generated a 100% profit in the last twelve months, and it is as simple as clicking on “Invest”, choose the amount, place the stop-loss, and the rest will be done practically on its own.
A second option is to directly copy traders of the platform: in “Copy People” you can find eToro users who are very successful investing and whose operations you can replicate.
In the profile of each user, you will be able to see their risk profile (the higher the risk, the more possibilities of earning more and losing more), their performance history, and what type of financial instruments they operate: equities, currencies, cryptocurrencies, commodities….
Replicating other people's investments can be very interesting and useful, but it is also a good idea to take advantage of the community to read other users and learn from their experience. It is great for acquiring important knowledge, especially if you intend to turn investing into a lifestyle.
How does leverage work
If you are not familiar with the term “leverage”, we'll put it short. When trading, it's the capacity of enlarging your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
About leverage, Take Profit and Stop Loss
Let's pretend that you are sure that NIO will raise its price, and you want to “go 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 credit, wait for it to be accepted, wait for the money, and then obtain NIO… But maybe once you have made all that, your prediction could've been confirmed a long time ago, and NIO would be already at such a high value that it is not worth trading.
Leverage is like a credit, but it is only a few clicks away! You will be able to operate with much more than what you have on the platform's wallet. It is simple, before investing you will see the different options as in the screenshot:
Trading with other assets allows you to use higher leverage. The reason is that leverage is most used for 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:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was “borrowed” from eToro).
- Then, turns out that NIO price does increases, as you thought, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- Once the $ 1k from leverage is returned, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours from the beginning.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But watch out: if everything goes ok and the price rises, you will make profits. On the opposite scenario, if the asset decreases, you will also lose more money than you invested.
Let's suppose 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 essential to know about Take Profit and Stop Loss.
Take Profit is an automatic order of selling once the asset achieves a certain price: you buy NIO shares at $ 100 and you ask eToro to close your operation as soon as the price reaches $ 120. It is very helpful to avoid being blinded by enthusiasm: a 20% profit is usually very good, but once you see it goes up, you might think you can earn even more, which is not always the case. Consequently, you might lose money if you don't close on time. So, Take Profit helps you to trade more safely.
On the other hand, when trading with leverage you should always use Stop Loss, because a small fall in the price of an asset can lead to a substantial loss. You always need to establish a Stop Loss lower than that suggested by the broker.
Practice account: How does it work?
Are you beginning in trading? Using a demo account can be useful. You just need to set the virtual mode and you can start practicing with a “fictional” portfolio.
A virtual account can be a good way of gaining confidence before starting to operate with real money. When you open your demo account, you will begin with a virtual amount of $ 100.000, to operate with a variety of financial instruments available on the platform, besides NIO.
The first attempt is not usually that good. But don't worry, since you can ask eToro to deposit back the virtual funds to your account.
Nevertheless, remember that investing is mostly about being prudent, and demo account trading can have the reverse effect. It is not the same to risk your own money than to operate with a fake balance that you don't mind losing. Besides, investing virtual money can prevent you from learning to control your emotions, as a true investor should.
Finally, if you intend to invest in the medium or long-term, with earnings almost assured just by duplicating a strategy, it is absurd that you waste years investing in virtual mode. On the other hand, short or medium-term trading is ideal to try out with the demo mode.
* 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.