If you’re thinking about getting started as a stock investor, buying shares in Lloyds, one of the UK’s biggest banking groups, might be an avenue worth exploring. But before you invest in any stocks, it’s wise to equip yourself with a solid entry-level understanding of the stock market. Our quick and easy to digest guide will help you buy Lloyds stock with ease.
If you’re ready to buy Lloyds shares now, follow the helpful links below and find a broker that works for you. If you’re not ready to get started yet, keep reading.
Compare the best platforms to invest in Lloyds shares
Want to invest in Lloyds shares? Click the links below to help you choose the right online broker for your needs. Our helpful investment guides will walk you through the best investment choices, and fill you in on how to get started with them.
Trade Lloyds shares, right now
Perhaps you’re more interested in short-term gains, in which case trading shares in Lloyds might be more your thing. Trading involves buying Lloyds shares and selling them within a short period of time, with an eye on snagging shorter-term profits. We’ve reviewed some of the best low-fee online brokers that are best suited to higher-volume trading.
How to buy Lloyds shares in 7 simple steps
Becoming a successful investor takes patience and research. Before you buy Lloyds shares, look into how the company operates and how the stock has historically performed. You’ll also want to get a read on how the stock market as a whole is faring. Methodical preparation is vital.
When you’re just getting started, it’s sensible to venture a relatively small amount of money. You can always invest more capital and try more complicated investments after you’ve gained some experience. Here’s a checklist to review when looking into buying Lloyds shares.
- Know the company. What is Lloyds? How did it grow to become a leading market for insurance and reinsurance services? How’s the company’s revenue and profit growth looking? Get to know the company so you better understand your investment.
- Learn the basics. Learn the key terms associated with buying stocks, such as bid price and ask price, market orders and limit orders. You’ll also want to understand various measures of fundamental strength, such as return on equity and profit margins. Finally, it’s good to know the different methods you can use to buy Lloyds stock, such as share-dealing and trading.
- Share-dealing vs Trading. When you’re share-dealing, you’re buying shares in a company. Simply put, to make money in share-dealing, you sell shares at a higher price than the one at which you bought. Alternatively, you can sometimes make money from dividends, as long as you buy shares of a company that issues dividends. Trading shares is a short-term approach, and can entail buying and selling shares on the same day (day trading). When day trading shares in Lloyds, focus on the stock’s chart. You don’t need to sweat the company’s long-term future.
- Set a budget. When you start investing, start with a smaller budget (let’s say £1,000). Lloyds currently trades nearly £63 a share, so you can buy plenty of shares with that budget. As you gain expertise and experience, you can get more aggressive and invest more capital.
- Choose a broker. There are plenty of reliable brokers online ready to help you buy Lloyds shares. Pick an online broker that offers a strong reputation, low transaction costs, and an easy-to-use platform.
- Evaluate the broad market. When the stock market goes up for an extended stretch (a ‘bull market’) most stocks will go up. When the market falls (a ‘bear market’), most stocks will fall. Follow the broad market’s trend rather than trying to fight the tide.
- Make your first investment. Your research has paid off. You now understand Lloyds’ business better, you have a better understanding of how to invest, you’ve settled on the right budget and the right broker for you, and you’ve verified that the stock market is doing well. Log in to your online brokerage account, type Lloyds’s ticker symbol (LLOY), check that it’s trading at a price you like, then buy. You’ve successfully bought shares of Lloyds.
Ways to invest in Lloyds – share-dealing vs trading
There’s a number of methods you can choose to buy, sell, and trade shares of Lloyds online. Let’s review some of them:
Share-dealing entails buying Lloyds shares and holding for a long time with the objective of achieving a larger long-term profit, as opposed to trading shares, a shorter-term method of trading.
- Pros: Share-dealing gives you the luxury of narrowing your focus and zeroing in on the company’s fundamental strength, rather than worrying about how to read a stock chart. If shares of Lloyds start going up, holding for longer could lead to big gains.
- Cons: Your money’s tied up for longer, meaning cash isn’t necessarily accessible for you to make more investments. If shares of Lloyds start diving after you buy, you’ll need to decide if you want to sell to avoid more losses, or sit through a potentially ugly correction.
CFD means contract for difference. CFDs are investment derivatives that let you speculate on the price movement of individual assets. Those assets can include forex, commodities or, indeed, shares in Lloyds. When CFD trading, you own the contract, but not the actual asset you’re trading.
- Pros: With a CFD, you can put down just a percentage of the total trade value, with the CFD broker covering the rest (trading with leverage). When trading with leverage, you can make more than you would if you’d only traded with your own money, assuming the stock goes up.
- Cons: Just as trading with leverage makes more money when a stock rises, it also means a bigger loss when a stock falls. if you leave a leveraged CFD position open more than a day, you’ll likely have to pay overnight fees. Also, when CFD trading, you lose the voting rights and potential dividends that come with owning shares in certain companies.
The more knowledge you acquire, the better prepared you’ll be to make smart investing decisions. Read our online CFD guide to enhance your investing knowledge. If you’re ready to start buying, click on the links above.
How to buy, sell and trade Lloyds shares for beginners
If you’re getting close to making your first stock purchase, here are some important things to know:
Buying Lloyds shares
You can buy Lloyds shares through an online broker. Buying shares is a good strategy if you want to hold for a longer period of time. Log in to your online brokerage account, type the ticker symbol (LLOY) of the stock you want to purchase and click Buy. You now own shares in Lloyds.
When selling Lloyds shares, landing a profit requires you to sell for a sum that’s higher than your buy price. You can use various different approaches to achieve this fundamental goal. You can try to hold for as long as possible, aiming to sell for the biggest possible profit. You can also follow Lloyds stock, see if it goes up, then sell up to protect your gains if the market starts to fizzle.
You can trade Lloyds shares with a conventional online broker or with a CFD broker. If you choose a CFD broker, know the risks that come with leveraged trading, as well as the extra fees that CFD brokers sometimes charge.
Our top tips for investing in shares of Lloyds
You’ve learned the basics of investing. Here’s a summary of key points to remember:
- Know your budget. Don’t invest more than you can afford to lose, especially when you’re just starting your investment journey. Be conservative at first. You can always put more money down as you become more experienced.
- Choose the right approach. You want your investment strategy to fit your goals, and also the amount of risk you’re willing to take.
- Stick to an investing plan and don’t react to emotions. Follow a sound investing plan and you’ll be more likely to succeed. Emotions like fear and greed can mess with your head and cause you to make iffy investment decisions.
- If market conditions change, be ready to bail. If the market starts plummeting, don’t let your money float away. Keep the state of the market in mind when making decisions about your investment.
- Learn from your mistakes. Everyone makes mistakes, but not everyone takes the time to learn from those mistakes. Review every one of your trades, figure out what went wrong, then think about what you can do better on your next trade.
Unsure which platforms to use?
Not sure where to go from here? That’s OK. Here’s a list of additional considerations to help ensure you’re ready to invest:
- Budget size. If you have a budget of, say, £1000, it’s wise to limit the number of trades you make. For instance, if you decide to day trade shares in Lloyds, you could very quickly get to 20 trades. If your transaction cost is around £10 per trade then boom, there goes 20% of your budget on transactions alone. Keep things simple initially by buying shares in Lloyds with an eye towards holding for a profit. If you have a larger budget (of, say, greater than £10,000), you have more options to work with, including day-trading, CFD trading, and other strategies.
- Risk assessment. Managing risk requires skill and experience. You can try riskier investment strategies once you’re more established. You might also consider more complex investing options, such as selling shares in Lloyds short (betting that the price will fall). Using a stop-loss order is another invaluable tactic. Say you buy shares in Lloyds at £63 per share, you can then put in a stop-loss order at £56.70 per share. That way if Lloyds stock falls, you don’t lose more than 10% on your investment.
- Market conditions. If a bear market takes hold, more defensive investment strategies such as bonds or commodities can be good alternatives to growth stocks. But if the market’s doing well, the time might be right to buy shares in Lloyds.
- Know your investing goals. If you’re trying to make money quickly, day trading can be a good option. Alternatively, if you want to ride with a stock for years or decades, you can buy and hold shares instead.
- Follow emerging trends. Technology is always evolving, in every industry, and innovation invariably creates new investment opportunities. If you plan to buy and hold Lloyds stock, you’ll want to make sure the company is changing with the times and not losing ground to competitors.
What is Lloyds?
Founded in 1686, Lloyds is a London-based provider of financial services, including retail and commercial banking. At year-end 2018, Lloyds counted nearly £800 billion in total assets. For more information on the company, including charts, live prices, analysis, and more, visit our Lloyds stock price page.
Try some of our stock market courses for beginners
Not feeling ready to buy Lloyds shares? No worries. You’ll learn all the fundamentals with our easy-to-follow educational courses. Once you’ve mastered the lessons from our courses you’ll be well equipped to buy Lloyds stock with confidence.