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  • Jay Smith

eToro Update - Week 40 2018


Stats given cover closed trades for the 1st October - 7th October

My total realized profit from the past week is 0.35% Overall the portfolio is down 5.13%

Profitable trades closed: 22

Unprofitable trades closed: 6

Most traded instrument: $AMD (10 Trades)

An erratic week as we enter the final quarter of 2018. The global markets are in a state of unrest, with the Nasdaq down almost 5% for the week. Unfortunately this drop hit right after I pulled out of several short positions on $INTC and $AMD and opened additional leveraged positions in $SQ $AMD $WIX and $ETSY. Unfortunately, this leaves us in an unhealthy position moving into the 2nd week of Q4. The crypto markets on the other hand are beginning to show some more healthy signs with a breakout for $BTC from the long-term downtrend looking more likely than unlikely to take place this coming week

eToro began the roll-out of the long awaited crypto wallet, with eToroX being released region by region over the coming weeks. The wallet has been in beta testing for several weeks now. To begin with it will only support the more major cryptocurrencies - Bitcoin, Ethereum, Litecoin and Bitcoin Cash. I would have expected to also see Dash in this list as the technology is similar to support this, but eToro assures us they will add more cryptos over the coming months. In the email eToro sent out announcing the wallet, they also specified the tight controls for transferring crypto out of the wallet. Users will not be allowed to transfer more than the total value they originally deposited onto eToro. Those profits you made in 2017 will have to be withdrawn the old fashioned way for now. This is by far the most cautious approach I have seen by an exchange. It shows eToro’s conservative approach to current rules and regulations regarding money laundering. Hopefully this softens over time as well. Alongside the new wallet eToro also announced some changes to the spread fees for crypto trading, cutting all fees by at least 50%. Great news for those of us looking to trade it more actively. I believe we are likely to see these decrease further again in the future as the wallet opens up and eToro is forced to compete more directly with traditional crypto exchanges such as Binance and Kraken who have much lower fees. The last thing I wanted to draw your attention to here is the naming. “eToroX” - What is the X for? It’s a cool letter, but if we look around the crypto space we can clearly see that this is usually used in the name of an exchange. Perhaps there are plans to split crypto out into its own exchange separate from eToro? Or maybe they just plan to enable token exchanges inside the wallet similar to Exodus. Maybe I’m reading too much into it. Regardless, this is all good news for us, the customers, but it is clear eToro still have more work to do and that the product is not finished, but will evolve over time.

The biggest news of the week came from a Bloomberg report that Chinese company Supermicro had been hiding additional hardware in motherboards to spy on major western companies, most notably $AAPL and $AMZN. The claims are as yet unverified, but quickly spread across the media. Both Apple and Amazon promptly responded denying the claims. To me, this appears likely a propaganda campaign to further insight hostility between China and the US. The hardware affected is likely no longer used by any major company as upgrades in the industry move so quickly, but this is likely to cause yet more uncertainty for the markets, especially in China and the Tech sector

Cryptos

$EOS - 1 trade, 10% profit, part of my ongoing effort as mentioned a few weeks ago to reduce crypto exposure to around the 33% level

$BCH - 1 short for 1.4% profit. It looks likely that the crypto market will break up, rather than down, especially given the instability of the wider markets currently. As a result I was more than happy to close out this short for a small return, leaving only 1 short left open for crypto

Stocks $AMD - 10 trades in total, 5 profitable. Losses range from -11.3% to -35.8% while profits range from 1.1% to 6%. Overall significantly down on AMD this week. Perhaps I need to move to somewhere with a 1-2 day delay for my internet connection, I appear to be shorting and longing a couple of days too early for $AMD recently, closing shorts at a loss that would now be in a healthy profit, and opening longs at a much higher price than necessary. I’ll be keeping a cool head during this correction though, as my long-term views for AMD remain unchanged

$ETSY - 1 trade, 0.3% profit. Closed after a relatively long holding time

$SQ - 4 trades, 2.2%, 22.3%, 18.3% and 34.3% profits made this a clear winner again this week

$INTC - 1 short, -7.5% loss. Intel reassured investors about their recent supply issues which lead me to give up on this short position. In hindsight, I would have held it open as the entire market has since slumped

$SEDG - 1 trade, 8.7% profit, very similar to a trade made a week ago, I saw the opportunity for a quick profit after $SEDG fell below 40 dollars again

$NFLX - 2 trades. 2.5% & 5.4% profit. One legacy position, one week long trade

$WIX - 1 trade, 6.6% profit on another legacy trade that’s been open for a couple of months

$TTWO - 1 trade, 0.4% profit. I’m holding onto one position as the Red Dead 2 title looks set to turn heads and bring in strong revenue ahead of Xmas

$NVDA - 3 trades, 3.2%, 3%, and 4.5% profit, leaving us no exposure to Nvidia for now

$AMZN - 1 trade, 2.7% profit

$ATVI - 1 trade, 0.8% profit. I lacked the confidence to hold on to this position long-term and am happier to take the money and leave

Looking Forward

Earnings season begins with Netflix next week; Twitter, Shopify, Google and Intel the following week

The crypto markets are due a big move as the long-term bear trend is about to collide with the long-term support level. A move up would likely see a rally toward 7500. A move down would suggest a prolonged Bear market well into 2019 and a potential floor of 4k

Comments and questions are welcome!


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