It boasts over 2.7 billion active users each month and its market cap stands at around 800 billion.
However, because it is an international company – and a large one at that – most investors or traders aren’t sure how to buy shares. The following article is a guide that you can follow to help you make some money off of Facebook’s incredible success.
Where to Buy Facebook Shares
The first thing that you should be aware of is where you can buy Facebook shares. Now, when share trading, you require a broker to give you access to the sales of shares. In this case, though, you can’t select just any broker.
Not all brokers will give you access to an international market. As such, you need to find one that will not just allow you to buy US shares, but will give you access to Facebook shares in particular. Thus, there are far fewer brokers to choose from.
Nevertheless, you still have to be careful about the broker that you decide to register with. It is important to carefully contrast all the ones that are available to you. Consider all the accounts, features, and support that they can offer.
At the same time, pay attention to the cost involved with share and other forms of trading. It is only by taking note of the fees, commission, or spread associated with a particular broker, that you can really appreciate how much of a profit you can make.
How to Buy Facebook Shares
There are two main ways that you can buy Facebook shares. The first involves actually buying stock in the company. This method allows you to own the shares that you have bought, becoming a shareholder in Facebook.
The second option is to trade on CFDs. Here, you speculate on the price movement of the Facebook shares. As a result, you don’t actually own any shares. Instead, you make a profit depending on how accurate you are about the shares increasing or decreasing in value.
For the average investor or trader, trading on CFDs makes a great deal more sense. Since Facebook is one of the most heavily traded companies in the world, each share cost is quite expensive. This means that most people are unable to afford a significant number of shares. Therefore, the shares that you can afford may not amount to all that much.
When you trade on CFDs, however, there is no need to own the shares. Furthermore, you have access to leverage through your broker. This means that you are only required to invest a far smaller, more affordable amount. Thus, you will find it easier to access this revenue stream.
Selecting the Best Online Broker
Choosing the best – and most suitable – online broker is a rather important task. The right selection can ensure that you minimize your costs while maximizing your profit. Furthermore, it can also make the trading process a great deal easier for you.
It is due to these reasons that you should consider HFTrading as your broker when buying shares for Facebook. Despite being a newcomer, this broker has already built up quite a reputation. This is largely due to the many trading opportunities it offers as well as its suitability to traders of all skill levels.
What is truly impressive about this broker, though, is that it gives you the opportunity to trade on CFDs with Facebook shares. HFTrading offers impressive leverage, allowing you to increase your position quite a bit. In turn, this ensures that you can make a greater profit, should your predictions prove to be accurate.
With HFTrading, there are three trading accounts that you can sign up for – Silver, Gold, and Platinum. You can base your selection on your budget and your preferred trading activities and volume. Silver is appropriate for new or first-time traders, while Gold and Platinum is better suited to more experienced traders.
All traders get access to the world renowned MetaTrader 4 trading platform. This is a respected platform that is used by serious traders. As such, you can guarantee that the trades can be placed quickly and efficiently.
Furthermore, with HFTrading, you can sign up for a demo account as well. This gives you the opportunity to try out various trading tactics and strategies and to discover if these are the right options for you. There are also plenty of educational resources that allow you to become a better trader.
Last, but certainly not least, HFTrading has excellent customer service. Thus, if you have any queries or issues, you will be able to get into a customer service agent almost immediately. Even if you can’t, you can guarantee that your questions will be answered in a relatively short period of time.
Opening Your Trading Account
Once you have selected the most suitable broker, the next step is to open your trading account. Keep in mind that this typically does involve some documentation. Many brokers will want to verify your identity and may ask for various forms of ID and some financial statements.
Once your identity has been verified, you will have the opportunity to open your account. Of course, by itself, your account isn’t all that useful. If you wish to begin placing trades, then you have to deposit a certain amount of money into your account.
This involves some careful calculations. Regardless of whether you are share trading or trading on CFDs, you need to create a budget for yourself. First, determine how much money you can afford to invest. Since there are no guarantees, there is a chance that you may lose this amount. Don’t invest or trade with money that you can’t afford to lose.
This sum will help you to calculate how many shares you can buy or how many CFDs that you can trade in. As mentioned, with shares, you will need the total amount outright. With CFDs, you will only have to pay a fraction of the cost, with your broker covering the rest.
You should be aware that some brokers will require you to have a specific balance in your trading amount. Thus, you will need to take this sum into consideration as well when deciding how much to deposit in your account.
Making a Profit with Facebook Shares
It doesn’t matter if you are buying Facebook shares outright or if you are predicting the price movement. At the end of the day, your goal is profit. Here is a closer look at how you can turn a profit when buying Facebook shares:
Conduct Technical and Fundamental Analysis
Yes, Facebook is a successful company. However, as with any other business, it has its high and low moments. Thus, before you invest in Facebook, it is important to conduct technical and fundamental analysis. This gives you a better look of how the company has performed in the past and how it may perform in the future.
Technical analysis looks at the previous price movements and volume. This allows you to identify trends and patterns. Using this information, you can predict how well the company might do in the future. Fundamental analysis looks at the finance and the management of Facebook. At the same time, you are also taking the current economic and industry climate into consideration as well.
Take Stock of the Operation
Then, it is a good idea to take a look at what is going on at Facebook. This includes usage trends, risks to operations, ad revenue growth, future outlook and more. You should also consider the number of active users, total revenue, and profit margins. Has this gone up or down over the last quarter? Does it appear that the trend will reverse in the following quarter?
Once again, this information will give you a better idea of the direction that Facebook is moving in. Does it appear that its popularity will continue? Or, is the company about to have a difficult couple of months. Now, what’s great about CFDs is that you can play either side of the market and still make a profit.
Find Your Entry Point
Last but not least, you have to figure out what your preferred entry point is going to be. This will be dependent on how much you can afford to trade with. In case you don’t like the current price point, there is no issue at all. You can simply set up an order that allows you to buy at a more appropriate time for you.
With share trading, this involves setting up a delay order. Your broker will then buy at a more suitable price level. With CFD trading, on the other hand, it is all about mitigating risk. Thus, you can set a Stop Loss order to ensure that you don’t lose more money than you are willing to.
These are the top factors that you need to know about when buying Facebook shares in Australia. Now, you can simply put this advice into practice.