Now That’s Sharp

Now That's Sharp

Everything that you will ever do comes with a certain amount of risk and sometimes we can actually measure the level of risk and more importantly determine if it’s worth taking.

For example, it’s much safer to sit on the couch than it is to cross the street and it’s much riskier still to get in the car and drive. However, sometimes it’s necessary to take on a bit of risk to achieve your goals.

In the world of investments, things are a lot more quantifiable, which makes the level of risk and potential return much easier to calculate. One of the most common ways to measure risk premium is the Sharpe Ratio.

This unique formula is designed to measure one investment against another and inform the investor what type of return they’re getting in relation to the risk they’re taking.

As you know, eToro has added a simple 1 to 10 risk score on all traders so that copiers can understand the risk factor of a person who they’re considering copying. More recently, we’ve been putting together several different CopyFund strategies to make it easier for you to manage a portfolio.

Today, we are proud to introduce the next step in this evolution with the @SharpeTraders CopyFund. This portfolio will be rebalanced on a quarterly basis to automatically copy the top investors on the platform giving you the best possible risk-adjusted returns.

Many thanks to @GilAlpert for the concept and design of this CopyFund and to our excellent investment committee for getting it off the ground.

Toro, Senior Market Analyst

Today’s Highlights

  • Risk Appetite is Back
  • Google Smashes Earnings
  • BTC 8K!!!

Please note: All data, figures & graphs are valid as of July 24th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Risk appetite is back in the markets!

Regardless of all the talk about trade wars and fed tightening, looking at the charts this morning it’s easy to see that investors are ready to take on some risks today.

The stock markets are green across the board, commodities seem to have found their footing and even the altcoins are shooting for the moon.

Google Earnings

One thing that could be boosting investor sentiment today is the phenomenal earnings report delivered by Alphabet last night.

Overall, Google’s parent company posted a revenue gain of 23.9% over the last year in advertising revenue and posted a gain of 36.5% in their “other revenues” category. The Earnings Per Share (EPS) comes out to $4.4, which is much higher than analysts were forecasting.

The EPS would have been $11.75 if not for the massive $5 billion fine from the EU antitrust lawsuit.

Shares soared in after-hours trading and are expected to open today at a brand new all-time record high around $1,250 per share.

Also, the crypto community is getting excited about Google because…

Crypto Rally Continues

As indicated above, it’s not just bitcoin that’s flying today. Contrary to what we’ve been seeing over the last week, this morning it seems that the altcoins are finally benefiting from the renewed crypto enthusiasm.

During the Japanese trading session, Bitcoin managed to take out the key psychological level of $8,000 per coin, clearing the way for a possible move up to $10,000. As of this writing, the price of bitcoin is up a total of 38% from it’s lowest point of the year, which was made less than a month ago on June 29th.

Let’s hope this rally continues.

As always, let me know if you have any questions, comments, or feedback. I’m always happy to hear it.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.
Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.
Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,

Mati Greenspan
Senior Market Analyst

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Images courtesy of eToro, Shutterstock

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Written by Mati Greenspan @ July 25, 2018 Mati Greenspan

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