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Airbnb, Inc. (ticker: ABNB), founded in 2007, is headquartered in San Francisco.
The company operates a global online platform that permits property owners to list and rent their properties as holiday accommodation. With 7,000 employees and a market value of US$74 billion, Airbnb helps provide cost-effective accommodation for travellers and boasts over 8 million active listings in 100,000 locations worldwide.
The term ‘CFD’ refers to a ‘Contract for Difference’ and works by forming an agreement between two parties to exchange the difference in value between the opening price of a trade and its closing price.
With FP Markets, Airbnb Share CFDs allow investors to trade rising (by entering long [a buy position]) and falling (entering short [a sell position]) price movement of the stock without taking ownership. CFDs derive their price from the price of the underlying asset. As such, with CFDs, you trade the price movement and negate the need for ownership.
CFDs are not limited to single stocks; they can be used to trade Currencies (the Forex market), Stock Indexes, Commodities, Bonds, Exchange-Traded Funds (ETFs), Digital Currencies, etc.
CFDs are also widely known for their leverage. To help you understand leverage, consider the following: Airbnb currently trades at US$115.32 per share. Suppose an investor purchases 1,000 shares of the company (usually unleveraged). This would set the investor back at US$115,320 (1,000 * 115.32). Investing in Airbnb Share CFDs with FP Markets allows you to trade a comparable position size with a 10% margin requirement. This means instead of an initial investment value of US$115,320, a CFD trader would only need to put up US$11,532 (115,320 * 0.10).
1. Open an FP Markets Forex and CFD Trading Account
To start trading CFDs with FP Markets, head to the FP Markets website, click the OPEN LIVE tab, and complete the short Account Application form https://www.fpmarkets.com, as shown below.
2. Download your Trading Platform
Following account approval, you will receive your login credentials via your registered email address. These details can be used to access the FP Markets Client Portal, a space allowing the investor to perform various tasks, such as updating personal information, taking advantage of Social Trading, and choosing and downloading your trading platform (below).
With FP Markets, you can use several trading platforms, including MetaTrader 4 (MT4), MetaTrader 5 (MT5), cTrader, and TradingView.
This article assumes the reader will be trading with MT5.
3. Find the Airbnb Ticker
For both MT4 and MT5, the process of finding the Airbnb ticker is straightforward.
Open your Market Watch (Ctrl+M), which is a list of products to trade with FP Markets. If Airbnb is not showing in the main panel, type ‘Airbnb’ in the ‘click to add’ tab and select the stock. This will then appear in your Market Watch (below).
Drag and drop Airbnb to the chart’s interface on the right. Assuming the market is open, this will provide a real-time price chart for the stock, as displayed below. At that point, you can alter the chart’s preferences to suit your trading style, from background colours and chart types to timeframes, technical indicators, and drawing tools.
4. Place the Buy or Sell Order
Press F9 to open MT5’s order window. The order window’s Symbol will display the Airbnb stock if you have an active Airbnb chart open. If not, use the drop-down tab and search for the correct stock before proceeding. After this, you may select the type of order you wish to trade with – ‘Market’ or ‘Pending’ – trading volume, the Stop-Loss and the Take-Profit orders. Once satisfied with the parameters, select buy or sell to execute the trade.
Short-term traders may also find use in the ‘One-Click Trading’ feature, essentially a function enabling traders to enter a market order with ‘one-click’ (trading volume must be set beforehand). The disadvantage of this feature is the absence of immediate risk management; the trader must enter Stop-Loss and Take-Profit orders after the trade is active. This is done through the trading terminal, which can be accessed by simply pressing (Ctrl+T).
Two examples of long and short positions using Share CFDs:
As of writing, its share price is down by nearly -15% year to date.
Overall, however, according to the company’s second-quarter earnings for 2024, released on 6 August, the company performed well. Q2 24 revenue increased by +11% to US$2.75 billion compared to Q2 23. However, the revenue growth rate has been decelerating since Q2 22.
The deceleration of growth can also be seen in the year-on-year growth rate per quarter, and this, as per some analysts, is one of the main reasons for the stock selling off following the earnings release. The company forecasts revenue growth to slow to +9% in Q3 24, down from +11% in Q2 24.
Furthermore, Airbnb generated US$555 million of net income in Q2 24, down from US$650 million in Q2 23. Therefore, this represents a decline in the company’s net income. However, Q2 24's operating cash flow grew by circa +12% compared to Q2 23; the operating cash flow margin also expanded to +38%. As a result, the company is seeing its operating cash flows and free cash flows increase.
The stock is selling for about 17 times its free cash flow, which provides around a 5.8% free cash flow yield, which is relatively high, considering the industry median is 4.7%. This metric, along with a company that has high-profit margins, suggests it could be undervalued.
Airbnb is down double digits in August, currently testing lows of US$113.24 (a noteworthy higher low formed in October 2023). Overhead on the weekly chart, resistance is at US$123.63, while below, support warrants attention at US$107.88. Referencing the Relative Strength Index (RSI), the stock records oversold conditions. Meanwhile, on the H4 timeframe, a resistance area between US$124.27 and US$121.79 is seen (note that this area houses the weekly resistance level mentioned above at US$122.63).
By and large, Airbnb is experiencing a downtrend in both weekly and H4 timeframes. However, the weekly chart’s RSI indicates an oversold market, and the stock is testing notable lows, which is serving as support. As such, a rally could be seen. With that being said, though, the H4 resistance area limits room to outperform at US$124.27-US$121.79.
Given the above-noted components, technical investors may be reluctant to commit until a clearer picture emerges.
Dealing in physical shares is another standard option for many investors. Buying Airbnb shares translates to partial ownership proportionate to the number of shares purchased. This generally means that an existing shareholder (a person or company that owns shares) liquidates (sells) some or all of their shares.
Becoming a partial company owner attracts capital gains (depending on the company’s performance), voting rights, and, in some cases, dividend payments.
The futures and options markets provide another alternative means of investing in Airbnb. However, unlike physical shares, futures and options contracts are leveraged financial derivatives, similar to CFDs.
Futures and options are exchange-traded products that can (albeit not often) result in the physical delivery of the underlying shares traded at the contract expiration date.
Importantly, a futures contract obligates both buyer and seller to transact, while an options contract provides the contract holder the right to buy and sell (there is no obligation).
ETFs are exchange-traded funds made up of a collection of assets. Like regular stocks on an exchange, shares of ETFs can be bought and sold during exchange hours. ETFs are commonly passively managed investment funds that track the performance of an underlying equity index; thus, the main objective of an ETF is to match an underlying index’s performance.
Ultimately, an ETF can help investors diversify a portfolio, given their investment in a basket of financial products. As a result, ETFs with Airbnb included will not perfectly mirror the share price.
1. Does Airbnb pay a dividend?
No, Airbnb does not pay dividends.
2. What are the major differences between CFDs and physical shares?
Ownership and leverage are the two key differences separating CFDs and physical shares.
CFDs derive their price from an underlying asset and are cash-settled, making partial ownership of the company impossible. Leverage offered in the CFD market is substantially greater than that of physical shares.
3. Can I trade Airbnb on MT4 or MT5?
Trading with FP Markets permits trading Airbnb via CFD pricing on MT5 and cTrader.
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