Thinking about investing money in the stock market? One option open to you is buying, selling, and trading shares of Centrica, the FTSE 100 listed international energy company. Do your research, learn key investing principles, and then you’ll be ready to go about buying stock in Centrica. We’ve produced this page and other easy-to-follow articles to help you make wise investment decisions on Centrica and other stocks.
If you’re ready to start investing, click the links below. If you need more time to read up more first, keep reading and we’ll take you through what you need to know.
Buy Centrica stocks, right now
If you already know your way around investing in stocks, simply choose an online broker and get started buying shares of Centrica:
Trade Centrica stocks, right now
Trading shares is a shorter-term investment approach than buying stock in a company. When trading shares of Centrica, you’re trying to make money by quickly taking advantage of market fluctuations – buying low and selling high. We’ve reviewed low-fee online brokers to help you make money from higher-frequency, short-term trading.
How to buy Centrica stocks in 7 simple steps
Before investing, you’ll want to get to know how Centrica operates as a company, as well as the track record of Centrica’s stock. You’ll then want to review the state of the overall stock market to see how it’s performing. Follow these steps first, and you’ll be better prepared to start buying shares of Centrica.
Here’s our quick checklist to review before you buy Centrica stock:
- Get to know the company. What is Centrica? How did it grow to become a huge multinational energy and services company? The better you understand how Centrica does business, the better your chances of success when you buy Centrica stock.
- Learn the basics. When it comes to technical analysis lessons, you’ll want to learn about concepts such as breakouts and bases. If you want to learn key measures of fundamental strength in order to make money holding shares for a long time, you’ll need to familiarise yourself with revenue and earnings growth.
- Decide if you want to be share-dealing or trading. Share-dealing is when you buy shares in a company such as Centrica, typically with the idea of holding onto those shares for a while and reaping the benefits of the company growing in value or paying dividends. To make money through share-dealing, sell your shares at a higher price than your purchase price, and through any dividends which are usually paid quarterly (if at all). Trading shares is a shorter-term approach, which can include day trading and swing trading. When day trading or swing trading Centrica stock, you’ll need to know how to read its stock chart (technical analysis), which is far more important in this case than fundamental market analysis.
- Set a budget. When you start investing, you should start with a smaller budget, something like £1,000. Centrica now trades around £32 per share, so you can comfortably buy 30 shares with that starting amount. As you gain more experience and build your bankroll, a budget of say, £10,000 can enable you to make higher-frequency trades via day trading or swing trading.
- Choose a broker. There are lots of online brokers that can handle all your trading needs, though to buy Centrica you need to find a broker that will sell fractional shares of its stock. That aside, you want to find a broker that offers a strong reputation, low transaction costs, and an easy-to-use platform.
- Evaluate the condition of the stock market. When the stock market rises 20% or more over a period of time, it’s known as a bull market, which means there is confidence that stocks will rise and more people start investing money. When the stock market falls 20% or more over a period of time, that’s a bear market, and this causes a loss of confidence and a further fall in stock value. Follow the broad market’s trend for your best chance of success.
- Make your first investment. You’ve done your investment research, set a budget, found an online broker, and confirmed that the market’s in a good condition. Now log in to your online brokerage account, type in Centrica’s ticker symbol (CNA), check that the stock’s price works for your strategy, then click buy. You’ve just successfully bought Centrica stock.
Ways to invest in Centrica
There are several methods you can use to buy, sell, and trade shares of Centrica online. Here’s a quick summary of the two most prominent:
Share-dealing involves buying and holding shares of a company in pursuit of getting the rewards of the company increasing in value over time. It’s a longer-term investing method than trading shares, which is geared toward making a quicker profit.
- Pros: Share-dealing allows you to focus on fundamentals, rather than worrying about stock chart analysis. If Centrica shares start rising, holding for longer could lead to big gains.
- Cons: You have less money left over to pursue other investment opportunities, as some of your capital will be tied up in your Centrica stock. If Centrica’s stock starts falling after you buy, you’ll have to decide if you want to cut your losses or sit through a potential correction that could see your stocks worth less than when you bought them.
A CFD (contract for difference) is an investment derivative that lets you speculate on the price movement of investment assets, such as Centrica stock. CFD trading allows you to own a contract, but not the actual asset you’re trading – like placing a bet on whether the market will rise or fall.
- Pros: CFD trading allows you to trade with significant leverage, so you can put down just a percentage of the total trade value. When trading with leverage, the size of your potential gains goes up significantly if you correctly guess the direction of the investment asset you’re betting on.
- Cons: While it leads to higher profits if the market goes up, leveraged trading leads to increased losses when a stock falls. If you leave a leveraged CFD position open more than a day you’ll also pay overnight fees, and you won’t have the voting rights and dividends that come with owning shares of certain companies.
The more investment methods you understand, the more choices you’ll have with your money. Read our online guides, news articles, and educational courses to improve your investing knowledge. Ready to buy Centrica stocks now? Then just click the links above.
How to buy, sell, and trade Centrica shares for beginners
If you’re a beginner considering buying, selling, or trading Centrica stock, here are some points to know:
Online brokerage firms provide trading platforms that allow you to buy shares quickly and inexpensively. Buying shares makes sense if you want to hold stock for longer. To buy shares, log in to your online brokerage account, type Centrica’s ticker symbol, and make your purchase.
When selling shares, you make money when you sell at a higher price than your buy price. You can make money by holding for as long as possible for the biggest possible profit, or selling more quickly to preserve profits and avoid a potential downturn. Selling shares can also be a good strategy when you want to cut your losses if you’ve made a bad decision earlier on – you always have to know sometimes when it’s best to take the loss rather than risk losing even more.
Trading shares can be done with either a conventional online broker or a CFD broker. CFD-brokered trades carry both significant upside and significant risk if you engage in leveraged trading. You should also be aware of the extra fees that CFD brokers often charge fees for leaving positions overnight.
Our top tips for investing in shares in Centrica
If you’re going to invest in Centrica stocks, here are Invezz’s top tips:
- Know your budget. Don’t invest more than you can afford to lose, especially when you’re just starting out as an investor.
- Choose a strategy that works for you. Find an investment strategy that fits your goals. Don’t take more risk than you can tolerate, and don’t try specific investing approaches if you don’t yet know how to properly execute them.
- Stick to an investing plan and don’t react to emotions. Following a sound investing plan will help you overcome the fear and greed that can plague investors during market extremes. Emotions can cloud your judgment and cause you to make bad investment decisions.
- If market conditions change, be ready to pivot. When the stock market starts falling, be ready to close your positions or sell your stocks before they fall further. You can always jump back in when the market resumes an uptrend.
- Learn from your mistakes. Review your trades, figure out what went wrong, and make a plan so you do better next time. Everyone makes mistakes, so it’s important not to put all your eggs in one basket, and to reflect on your errors whenever a trade doesn’t work out.
What should I consider before buying, selling, or trading Centrica stock?
Not sure where to go from here? Well, here is a run through of the basics you want to bear in mind before deciding whether to buy stock in Centrica:
- Budget size. The larger your budget (say, £10,000 or more), the more creative you can get when trading, with day trading and CFD trading becoming more viable options. If you have a smaller budget (around £1,000), the more buy-and-hold option makes more sense, since you avoid churning through frequent transaction costs if you have many trades open on CFD platforms.
- Risk assessment. Avoid risky investment strategies when you’re just starting out. You can also use stop-loss orders to protect your investment. Here’s how that works: Say you buy shares of Centrica at £32 per share. You can then put in a stop-loss order at £28.80. That way if Centrica’s stock falls to that level, your stock will automatically be sold. This limits the maximum you can possibly lose to 10% of your original investment.
- Market conditions. When a bear market begins, defensive investment strategies such as bonds, commodities, and cash make more sense than buying lots of growth stocks. If the market’s flourishing, you can feel more confident buying shares of Centrica.
- Know your investment goals. Day trading can be a good approach if you’ve learned how to read stock charts and want to make money quickly. If you have the patience to wait for bigger gains, you can opt to buy and hold shares.
- Follow emerging trends. Centrica is a leading provider of electricity and gas. That means it will need to keep a close eye on developments in cleantech to make sure it holds onto its market shares. Keeping up-to-date with news that affects the stock market is a good way of staying ahead of market movements.
What is Centrica?
Centrica is a UK-based energy company founded in 1997, Centrica provides electricity and gas service to businesses and consumers in the UK, Ireland, and North America. The company reported revenue of £26.8 billion in 2019. For more information on the company, including charts, live prices, and analysis, visit Invezz’s stock price page for Centrica.
Try some of our stock market courses for beginners
To learn more before investing, check out our educational courses. That way you’ll be better prepared to buy shares of Centrica and make smarter investment decisions going forward.