eToro - Need Help understanding leverage x5

ESonic

I have bought shares in Netflix through eToro.

First one - I've invested 1,000 dollars - that made profit of 124.09 dollars
Second one - I've invested 200 dollars - that made profit of 94 dollars

Now the second one is CFD and leverage x5. I don't quite understand what this means. Does anyone know?

Also if we have strong pound against the dollars, does that mean each dollar buys more of pound?

Thanks in advance.

masonic

Leverage x5 means that you can lose your money 5 times as quickly than the unleveraged variety.

If you are not sure what a strong pound means, then perhaps it's a bit early to embark on currency speculation.

ESonic

I am just wondering when to sell my shares, right now I think the pound is about to get weaker and my shares are in dollars. Do I sell my shares and turn them from dollars to pound now or after brexit?

If I invest in x5 leverage, does this mean my profit will be x5 higher?

I am thinking about buying more Netflix shares before their earnings is reported tomorrow.

ESonic

Do you guys also think eToro is best place to buy and sell shares in short term?

londoninvestor

ESonic wrote: »

Do you guys also think eToro is best place to buy and sell shares in short term?

Not sure how it compares to similar products, but my observation would be that it's a dangerous type of activity:

a) It's hard for amateurs to have an advantage over expert and professional traders
b) Leverage means you can lose money quickly and for many people, it's hard to stay self-disciplined in this scenario.

masonic

ESonic wrote: »

I am just wondering when to sell my shares, right now I think the pound is about to get weaker and my shares are in dollars. Do I sell my shares and turn them from dollars to pound now or after brexit?

US investments rose in value in pounds when the result of the Brexit referendum was known and the pound weakened. If you are concerned about the impact of Brexit, then holding international investments would shelter you from the impact on the pound (good or bad).

If I invest in x5 leverage, does this mean my profit will be x5 higher?

Only if you bet the right way.

I am thinking about buying more Netflix shares before their earnings is reported tomorrow.

So you think the figures will be better than expected by those who have studied the company at length?

ESonic wrote: »

Do you guys also think eToro is best place to buy and sell shares in short term?

They are probably not a bad place, but trying to make money placing short term bets on shares rarely works out in the long run.

ESonic

Thanks guys for the advice.
I've bought some shares in Netflix - I think their earnings will be good.
I made good decision so far, hopefully this will work out.

I plan on selling my shares tomorrow.

masonic

It appears you're not off to the best start. The rejection of the Brexit deal in the House of Commons has led to the pound strengthening against the dollar and therefore your investment being worth slightly less in pounds. Let's hope those Netflix financials tomorrow are particularly good.

Alexland

It's a wacky world where a government defeat causes our currency to strengthen!

Back on topic - wouldn't touch eToro with a barge pole.

Alex

Voyager2002

ESonic wrote: »

I have bought shares in Netflix through eToro.

First one - I've invested 1,000 dollars - that made profit of 124.09 dollars
Second one - I've invested 200 dollars - that made profit of 94 dollars

Now the second one is CFD and leverage x5. I don't quite understand what this means. Does anyone know?

Also if we have strong pound against the dollars, does that mean each dollar buys more of pound?

Thanks in advance.

The trades that you are doing are extremely high risk: far riskier than anything that I would do with my money.


At the same time, your questions make it clear that you do not understand what you are doing and why it might all go horribly wrong for you. So it is highly unlikely that you have assessed the risk involved.


I do have to say that the best thing to do is close these positions as soon as possible and instead follow Warren Buffet's advice and invest only in things that you understand.

System

ESonic wrote: »

Thanks guys for the advice.
I've bought some shares in Netflix - I think their earnings will be good.

Disney is about to set up its own online streaming service taking a lot of content out of Netflix. Netflix have also upped the prices in the USA which has seen shares rise in the past but they've not had competition like Disney. In their main market the multiple subscriptions you're going to need to get the content you want may see people returning to cable as the differences will be marginal.