PayPal

What are PayPal stocks?

PayPal is headquartered in San Jose, California, and the company's operations centre is in La Vista, Nebraska.

PayPal stocks are traded on the NASDAQ Global Select Market and have the ticker PYPL. Its stocks are also traded on the NASDAQ 100, S&P 100 and S&P 500.

The digital payment platform was launched in 1998 by Conformity, a software company. It was designed for Palm Pilot users. Two years later, it merged with Elon Musk’s online banking company X.com. It was officially renamed PayPal in 2001.

The auction site eBay acquired PayPal in 2002 and PayPal went public through an IPO in February of that year. It traded on the NASDAQ with its initial PayPal Holdings Inc. share price at $13. It became the most popular payment option for eBay transactions. In 2015, PayPal became an independent company.

Over the years, PayPal has acquired other brands that slot into the digital financial transaction sphere. These include Braintree in 2013, which owned rival services Venmo, Paidy and Xoom.

PayPal does not pay dividends and has never split its stock.

Historical performance of PayPal stocks

PayPal (PYPL) Holdings stock had an average price of $72.59 in the 52 weeks to the end of September 2023. And a market cap of around $60 billion at the end of September 2023.

The share price for PayPal increased by more than 40% the day it went public in February 2002. The initial $13 offering price soared to $18.50 as soon as trading opened. By the time trading ended, the stock had reached $20.09.

During the pandemic, PayPal initially lost 30% of its value before seeing a surge of over 255% between March 2020 and July 2021. The company enjoyed this growth due to consumers relying heavily on online transactions.

However, since these initial highs, PayPal has seen its stock price slump due to rising competition in the online payments space. In addition, the percentage of retail online sales has reduced since the early 2021 peak. This is largely due to the ongoing cost of living crisis and people returning to high street shopping.

While the fortunes of PayPal stock have varied in the last few years, financial results for Q3 2023 are expected to total $7.4 billion. Adjusted earnings per share are set to rise between 13% and 14%. Management forecast that PayPal stock could rise to $70.

What influences the price of PYPL stocks?

PayPal's stock price can be affected by several factors. Some of these factors can influence entire markets as well as individual companies:

• Company reports: Financial and other news from the company can have an impact on trader sentiment. If a company reveals positive profits or acquisitions, share prices can start to rise. Should the company report staff layoffs or poor financial performance, share prices can fall.
• Global events: Events that have a worldwide reach can influence supply and demand. For example, the global pandemic affected almost every industry. Some businesses, such as PayPal, saw positive results as more people turned to online transactions and digital platforms, while others struggled through lockdown.
• Economics: Global or US economies can influence how PYPL stock prices Recession, inflation rises, or other types of economic uncertainty affect stock prices and trader sentiment.

How can I trade PYPL stocks?

One way to trade PYPL stock is through financial derivatives. This option allows you to enter or exit a trade without owning the underlying asset. One of the main advantages of trading via derivatives is that you can trade in either market direction by speculating on the price increasing or decreasing.

There are different methods:

• CFDs: Contracts for difference (CFDs) allow you to buy or sell based on whether you think the value will increase or decrease. You will profit or make a loss relative to the difference in the PayPal stock price between the opening and closing trades.
• Spread betting: The 'spread' is the difference between the buy and sell prices and the outcome depends on the market direction and your prediction. Either go long or short and any profit or loss you make is determined per price point movement.

Leverage

Use leverage to increase your market exposure when trading via derivatives. Leverage allows you to open a position with a smaller deposit. However, using leverage can also magnify any losses, so it's important to be aware of this risk before you enter a trade using this option.

How to invest in PayPal stock

As well as trading without owning the asset, you can buy PayPal Holdings stock. Whereas financial derivatives trade on the direction the market moves in, this option allows you to invest in shares directly.

This option can be appealing because it can be a lucrative longer-term option. This is because there is no need to move quickly, and traders can ride out any market fluctuations.

But buying PYPL stock means potential opportunities to profit become limited. This is because the only way to see a return on investment is if the value of your stock rises. If the price drops in bear markets, investors who own stocks and shares in PayPal cannot make profitable trades.

Advantages of trading PayPal stocks

• Market exposure: PayPal is a leading constituent of NASDAQ, along with other exchanges, so trading its stock means you'll gain exposure across a major market.
• Trade both ways: Trading PYPL stocks allows you to take advantage of both bullish and bearish markets through financial derivatives.
• Leverage: You can open a position with a smaller deposit when using leverage. This opens the door to you potentially maximising your capital. However, losses can also be increased should your trade go against your prediction.

Disadvantages of PayPal stocks

• Leverage risk: Leverage used to increase your position can leave you at risk of losses rather than profits.
• Limited portfolio: Trading just one company's stock restricts your portfolio and can leave you vulnerable if the company's stock price changes dramatically. Rather than limiting trades to one company, traders often find it more profitable to diversify across a range of company stocks.
• Market fluctuations: Volatility in the market can occur, and this can be unpredictable. Even with robust technical analysis, markets can move in unexpected ways due to unforeseen influences. This could be a global event or economic news. So, the price of PayPal stock today could shift significantly tomorrow if something unforeseen occurs.

How to start trading PYPL stocks with Tradu

1. Open an account: Open a Tradu account online to begin trading.
2. Create a strategy: Work out your level of risk tolerance, build trading goals and choose your preferred markets.
3. Research: View historical data for PayPal stock, compare with the stock price for today, and apply technical indicators to maximise your profit-making opportunities.
4. Open your position: Choose from CFDs or spread betting to place your trade. Set risk-management tools to limit loss, then monitor before closing your position.
5. Use our trading resources: Our insights may help you uncover new trading angles and increase your opportunities.
6. Diversify your portfolio: Grow your trading portfolio with a range of other markets including indices, forex and commodities.