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How to buy
For those who live in Philippines, the best way to invest in Spotify 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 our 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: 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 purchase
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.
Is Spotify a buy?
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.
What are CFDs?
It is possible that you have found the acronym CFD more than once if you already registered on eToro. We will explain exactly what this means, but you should know first that cryptocurrency trading on eToro is only CFD if you are short-selling or select leverage higher than x2 (but this is not even available on eToro).
In case you are thinking about day trading cryptocurrency or other practices, we will also address terms like leverage and “going short”.
eToro allows you not only to bet if you are “in the black”, but through CFDs you can also bet “in negative”. For instance, you have the conviction that the Spotify will go down, so probably you consider that the best thing to do is wait until it does and then go in. But if you really think that it's going down, why not making some profits?
The operation known as “going short” will allow you to do that. It functions, roughly, like this:
- They lend you, for example, 100 units of Spotify, with a total price of $ 5,000 (these are completely imaginary figures)
- You sell the 100 units and earn $ 5,000
- The price falls, as you thought, and the unit of Spotify goes from $ 50 to $ 30
- You obtain the 100 units again, but at their current price, $ 3,000
- You return the 100 units to the person that loaned them to you
- The difference is yours, so, you will have earned $ 2000
It is really simple. Just keep in mind that by trading in Spotify on eToro, you can make money if you anticipate downs in the price.
What's the difference between CFDs and futures?
If you want to know, next you have some major differences between Futures and CFDs:
- Futures: operations are made with another trader.
- CFDs: you don't operate with someone else, but the counterparty is the brokerage.
- Expiry date:
- Futures: they expire. Once the contract expires, it is closed even if you have losses.
- CFDs: they don't expire. It is possible to wait until you are in a good shape to close.
- Futures: it is very narrow
- CFDs: a lot of variety, there are CFDs of practically anything
- Minimum investment amount or “trade size”:
- Futures: minimum investment is higher
- CFDs: very low
- Trading costs:
- Futures: being higher figures, rates are usually proportionally lower
- CFDs: fees are higher
- Futures: you can't leverage
- CFDs: it is always possible to leverage
What are the instruments you can trade in eToro?
You already know about criptocurrenciesstocks, there are more financial assets available.
What do you know about Exchange-traded funds? They are passively managed funds, known for combining the benefits of stocks and mutual funds: they can be traded regularly at market price, but include a much wider diversity of assets and the rates are significantly lower.
Index funds are most adequate for those interested in long-term trading, particularly for beginners. If you don't need to withdraw your money in less than five or ten years, index funds are the safest option.
You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers achieve that, apart from some specific cases, like Warren Buffett's.
If someone brags about having beaten the index, they probably did it for a short time or on a specific occasion, or sometimes the commissions are so high that indexing would be a better decision.
With index funds, you won't be concerned about that: most of the time, they beat active managers in the long term, and the fees are lower than you imagine.
What is known as Forex trading consists in the trading of currencies. Put differently, is the conversion between currencies to make a profit through the operation.
If you decide to exchange euros and dollars, you buy euros and pay with dollars, expecting that the euro will increase compared to the dollar. Then, if you bought each euro for 1.15 USD and you sell them back when their price is 1.20 USD, that margin will be yours.
Perhaps you already inferred this, but trading with currencies requires investing a lot, since fluctuations tend to be low, or using much leverage, which is a bit like skating on thin ice. In case you are just starting in trading, we don't recommend beginning with Forex, because it is very risky and intricate.
eToro allows exchanging the most popular currency pairs. However, bear in mind that in this market sales are always made through contract for differences, thus you won't own the real asset.
How to deposit funds on eToro
When it comes to payment on eToro, there isn't really 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, bank transfer, credit card, Skrill, or Neteller.
Of course, take into consideration that for security policies, you need to be the account or credit card holder.
The lowest amount is $ 200, and there is a maximum authorized for unverified accounts, so if you plan to operate with higher amounts, contact Support beforehand to verify your account.
You can pay in any currency and eToro will do the conversion to USD. However, we suggest depositing directly in USD since the platform charges a fee for the conversion.
There are several ways to trade cryptocurrencies: for example, you can buy and hold, or you can day trade using volatility of the market to your advantage.
My recommendation for those who are starting to trade is going for a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work on its own.
This means that if, for instance, you purchase a cryptocurrency at $ 10, it reaches $ 20 and then decreases to $ 12, your stop loss will close your position at $ 16-17 and you will have earned a decent profit.
You may be wondering: why not selling back when the cost is at its maximum? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and give good results.
Later on, you will be able to apply more sophisticated techniques, such as short-selling or using leverage.
How does a demo account work?
If you are taking your first steps as an investor, the option to operate in “demo” mode may be helpful. You only need to set a virtual account and you will be able to operate with “imaginary” funds.
A virtual account can help you to practice and gain experience before starting to trade with real money. When you create your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of assets available on eToro (not just with Spotify).
If your first attempts don't go well and your balance ends at zero, you can always ask the platform to replenish $ 100k of virtual funds. You'll probably do better on the second try.
Keep in mind that trading is mostly about being cold-minded, and perhaps a practice account can prevent you from controlling your impulses. It will never be the same as risking your own money.
Evidently, if you are interested in investing in the long or medium-term, it makes no sense that you try the demo mode and waste years waiting to see the results. On the other hand, it can be very useful if you want to practice short and medium-term investment.
Have you heard about “social trading”?
The first platform that conceived 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 they didn't limit themselves to transferring the logic of the social network to the trading world. They could have made the umpteenth social network in which users discuss investing, but they were not satisfied with that: the great innovation of eToro was allowing investors to replicate the investments of other users, who were paid for their ideas.
You will find in the left menu of the site the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” contain a collection of financial assets of a certain sector. Let's say that you consider that the gaming sector is going to succeed soon but you don't know which stocks to select, you just have to invest in the CopyPortfolio called “InTheGame”, which includes companies like Google, Microsoft, NVIDIA, Nintendo, Logitech, AMD, Intel…
You should know that in the last twelve months, CopyPortfolio has given returns of 100%. And you can benefit from it just by choosing a portfolio, enter your chosen amount, place the stop-loss and click on the “Invest” button.
The other option is to directly copy users: in “Copy People” you can find eToro users who are very successful and whose operations you can replicate very easily.
In the profile of each user, you will be able to see their risk profile (how much risk do they take), their performance, and the kind of assets they operate: stocks, currencies, cryptocurrencies, commodities….
Besides duplicating other investor's moves, which is really interesting and helpful, we also suggest that you benefit from the community by reading other users. You can learn a lot from their experiences and knowledge, particularly if your goal is to make a living from investments.
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.