Ready to invest in Amazon stocks and shares? Great! If you don’t know the ins and outs of investing, we’ll take you through all the basics and help you make an Amazon investment that adds up. It’s easy to see why you might be drawn to the possibility of buying shares in a company like Amazon. But knowing how to execute a trade and making a profit are two very different things. If you’re already well versed in online investing we can help you to identify the best brokers and make smart, switched on decisions with your money.
Buy Amazon stocks right now
Ready to invest in shares of Amazon’s stock? Click below to choose the online stockbroker that works best for you.
Trade Amazon stocks right now
Looking for an option other than long-term investing? You can also trade shares of Amazon. We’ve reviewed the best low-fee online brokers for higher-volume trading, allowing you to make an educated assessment and pick the best broker for you.
How to buy Amazon stocks in 7 simple steps
If you’re contemplating an investment in Amazon stock make sure you’re equipped with the knowledge and insight you need to make a good call. Take your time evaluating Amazon’s stock before choosing the method you want to use to buy shares. Once you’re satisfied that you’re making an informed decision you can get down to the task of buying stocks like Amazon.
Investors sometimes start buying shares online with a relatively small amount of money. As they gain experience, they might then raise the amount of money they’re willing to risk and try out more complicated investing and trading methods. Here’s a quick checklist to follow as you consider buying Amazon stock.
- Know the company. However well-known Amazon is, it’s important to ask fundamental questions before investing. What is Amazon? How did the company get its start? How did it grow? Is Amazon’s revenue and profit growth picking up? Is the company innovating? The more you know about Amazon, the better positioned you’ll be to make smart investment decisions.
- Learn the basics. This includes all the terminology that comes with buying Amazon stock, such as bid price and ask price. It also includes the different ways you can invest in the company, such as share-dealing and trading…
- Share-dealing vs Trading. Share-dealing is a form of investing that involves buying shares in a company. There are two ways you can make money from share-dealing: The first is when you sell shares at a higher price than they were valued at when you bought them. The second can come from dividends. Some companies issue dividends to shareholders as they share their profits. Trading usually refers to a shorter-term approach to investing, including buying and selling shares in a company on the same day (also known as day trading). If you choose to day-trade shares in Amazon, you’re more concerned with reading the company’s chart than you are with projecting how consumers will choose to buy books and toasters in the future.
- Decide your budget. When you first start investing in stocks, it’s a good idea to go in with a smaller budget. Say, a couple thousand pounds or less. With Amazon trading around $1800 a share, that might mean simply buying one share. As your experience grows, you might start to take a more aggressive approach.
- Choose a broker. There are many different online brokers you can use to buy and sell Amazon stock, including brokers that only charge a few dollars per trade. Find a broker that makes trading easy, while also offering low fees and a strong reputation.
- Assess market conditions. When the stock market is going up sharply (a ‘bull market’), most stocks rise. When the stock market is going down sharply (a ‘bear market’), most stocks fall. Follow the broader market trend, rather than trying to fight these prevailing headwinds.
- Make your first investment. You’ve learned all about Amazon’s business, and the basics of stock market investing. You know your budget, you’ve found a broker you like, and you’ve ensured that the market is strong. What now? Simply log onto your online brokerage account, type in Amazon’s ticker symbol (AMZN), make sure that the price Amazon is trading at isn’t too high, then hit the Buy button. Congrats! You now own Amazon shares.
Ways to invest in Amazon – share-dealing vs trading
There are a few options to buy, sell, and trade Amazon’s stock online, depending on your preferred investing strategy. Here are some popular options:
Share-dealing is a form of investing that involves buying shares of a company. It’s usually denotes a longer-term approach than trading shares for a quick profit.
- Pros: You won’t need to master chart-reading and technical analysis. If Amazon starts going up, holding for a longer period of time could result in an impressive profit.
- Cons: You’re tying up your money for a longer period of time, instead of having it free to make other transactions. If Amazon starts falling right after you buy its stock, it could be a tough emotional journey to sit through a major correction.
A CFD is a ‘contract for difference’. CFDs are investment derivatives that let you speculate on the price movement of a given asset (such as forex, commodities or Amazon stock) without actually owning that particular asset (in this case, shares of Amazon).
- Pros: With a CFD, you only need to deposit a percentage of the total trade value. The broker provides the rest. Because you’re trading with leverage you’ll make a bigger profit if Amazon’s stock rises than you would if you only ventured your own money.
- Cons: Just as trading with leverage nets you more money if Amazon shares rise, it also raises the size of your loss if the stock falls. Also, be wary of leaving a leveraged CFD position open for more than a day – you’ll usually have to pay overnight fees. Finally, while CFD trading can make sense as an alternative to owning and storing gold bars or piles of currency, it can make less sense for trading stocks, since you lose the voting rights and potential dividends that can come with owning actual shares.
The more you know, the better equipped you’ll be to buy or trade shares of Amazon. Read our guides and courses to get you up to speed. Or, if you’re ready to give it a go, click on the above links.
How to buy, sell and trade Amazon shares for beginners
Here’s the ins and outs of what you need to know before you buy, sell or trade shares in Amazon:
Generally, this involves using an online broker. Buying shares is a good idea for investors who want to hold for longer periods of time. Log onto your online brokerage account, type in the ticker symbol of the stock you want to purchase (in this case AMZN), click Buy, and within a couple of seconds you will own shares.
When you sell the shares you bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for as long as possible, hoping to get the biggest profit possible. Or, if you see that Amazon’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits rather than being greedy in hoping for more.
You can trade shares either through conventional transactions, or by using a CFD broker. If you choose the latter, make sure you understand the risks that come with trading on leverage and factor in the extra fees that CFD brokers often charge.
Our top tips for investing in shares of Amazon
If you feel confident that you have a solid overview of how to invest in Amazon stock you might be ready to take the plunge. Here are some key points to remember before you invest:
- Be sure about your budget. Make sure the amount you invest isn’t more than you can afford to lose. You don’t want to end up in debt.
- Choose the right approach. Make sure the investment strategy you’re using fits your investment goals, and your risk tolerance. The more experience you gain, the better equipped you’ll be to take on riskier and more complex methods of investing.
- Stick to a logical investing plan, and don’t get swayed by emotion. Follow a sound plan, and you’ll be more likely to achieve success. Letting emotions like fear and greed affect your decision-making can lead to negative results.
- If market conditions change, be ready to react. When the stock market falls, you can avoid going down with the ship. Keep prevailing market conditions in mind when making decisions.
- Learn from your mistakes. You could easily make a mistake when buying Amazon stock, whether you’re a beginner or an expert investor. If things don’t go to plan be sure to analyse your mistakes. Figure out what went wrong and how you can improve. You can apply these lessons in the future and produce better results.
Unsure which platforms to use?
Still not sure where to go from here? That’s normal. Here’s a list of considerations to help you decide your next move:
- Budget size. If you have a budget of a couple thousand pounds or less, keep things simple by just buying one share of Amazon, with an eye toward potential profit when you sell. If you have a larger budget (say, greater than £10,000), you have a greater number of logical options to work with, including day-trading, CFD trading, or buying multiple shares.
- Risk assessment. The more you know, the better equipped you’ll be to deal with risk. If you take the time to learn, more complex investing options could make sense for you. For instance, you can choose to sell Amazon shares short. When you sell shares of a stock short, you’re betting that the price will go down, not up. If you don’t feel you’re ready for that challenge, you can always try to protect your investment. For instance, if you buy shares of Amazon at $1800 per share, you can put in a stop-loss order at $1620 per share. Consequently, if Amazon’s stock starts falling, you won’t lose more than 10% on your investment.
- Market conditions. Let’s say that stocks have fallen into a declining market (also called a ‘Bear Market’). In such circumstances more defensive investment strategies – such as bonds or commodities – are perhaps a better bet than growth stocks, like Amazon. On the other hand, if the stock market is performing well, take advantage by buying shares in Amazon. You can follow the latest stock market news right here on our site.
- Know your investing goals. If you’re trying to make money quickly, take the time to learn about faster-moving trading techniques such as day-trading Amazon (buying and selling shares on the same day). If your timeframe is more like 20 years, you can simply buy shares based on your long-term faith in the company.
- Keep track of emerging trends. Technology is always evolving, bringing with it exciting new investment opportunities. When the Internet took off, stocks like Amazon reaped the benefits. But don’t disregard the possibility that innovative Amazon challenger may one day emerge. Consider how that might affect Amazon’s market share and overall financial health.
What is Amazon?
Amazon is a company that got its start selling books online, way back in the early days of the Internet. Since then the company has grown into the largest online retailer in the world, selling virtually any item you can imagine and redefining consumer behaviour across the planet. For more information on Amazon, including charts, live prices, analysis, and more, visit our Amazon stock price page.
Try some of our stock market courses for beginners
Our stock market courses are designed to equip you with the fundamental skills you need to become a savvy, clued up investor. If you’re still not ready to buy shares in Amazon take a tour of our site and you’ll find all the information you need to invest with confidence.