Thinking about buying stocks in Alibaba, the Chinese multinational conglomerate? You’ve come to the right place – we’ll help you find the best online brokerage and give you the knowledge and insight you need to make a smart investment. If you’re ready to buy Alibaba shares, we’ll show you how, just keep reading.
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Trade Alibaba shares, right now
Not interested in long-term investing? There are other ways to make money on the market, such as trading Alibaba shares. We’ve written reviews of the best online trading brokers that make frequent trading easy.
How to buy Alibaba shares in 7 simple steps
If you want to increase your chances of success when buying Alibaba’s stock, evaluate both the company and the stock’s history before investing in BABA shares. Beginners should consider buying Alibaba stock online using a relatively small amount of money. As you gain experience and expertise, you may then decide to invest more money.
Here’s a quick checklist for investing in Alibaba shares for you to consider:
- Know the company. What is Alibaba? How did the company come into existence? How did it grow in size and influence? How strong is Alibaba revenue and earnings growth? How well equipped is Alibaba to grow in the future? The more you know about Alibaba’s business, the better prepared you’ll be to invest in its stock.
- Learn the basics. Start by learning the terminology that goes with buying Alibaba shares. You’ll want to understand key fundamentals such as revenue growth and earnings growth, and also trading terminology like bid price and ask price. You’ll also want to learn the different ways you can trade and invest in Alibaba shares, including share-dealing, trading, and contracts for difference (CFDs). You can find all the basics in our stocks trading course.
- Share-dealing vs Trading. When share-dealing, you’re buying shares of a company, in this case you are buying Alibaba stocks. There are two ways to make money in share-dealing. You can sell shares at a higher price than your buy price, or collect dividends, assuming it’s a company that issues dividends. Trading is a shorter-term approach to investing, which can include buying and selling shares of a company on the same day (day trading). When you day trade Alibaba shares, you’re interested in the stock’s chart, not the company’s long-term future.
- Set your budget. When you first start investing in Alibaba, consider going with a smaller budget. That budget could be $1000, or less. Alibaba’s stock currently trades a little higher than $200 a share, meaning you could buy a few shares with a $1000 investment. As you gain experience, you may wish to put larger sums of money on the line and invest in other stocks.
- Choose the best broker for your needs. It’s not hard to find an online broker that will enable you to buy and sell Alibaba shares. But not all online brokers are created equal. Find one with an easy-to-use trading platform, strong reputation, and low fees.
- Assess market conditions. When the market rises for a few months or a few years (a “bull” market), many stocks do the same. When the market plunges for a few months or a few years (a “bear” market), many stocks follow suit. When a bear market occurs, your chances of failure increase when trying to invest in individual stocks.
- Make your first investment. You now understand Alibaba’s business, and the basics of how to invest. You know your budget, you’ve found a broker, and you’ve confirmed that the market is thriving. Time to invest. Log into your online brokerage account, type in Alibaba’s ticker symbol (BABA), verify that the stock price isn’t too high for your liking, then hit Buy. Congratulations, you now own shares in Alibaba.
Ways to invest in Alibaba – share dealing vs trading
There are numerous ways to buy Alibaba shares, as well as sell, and trade BABA online, including:
When you’re share dealing, you’re using a longer-term strategy than you would when trading shares in the hopes of a quick profit.
- Pros: If you plan to buy Alibaba shares and hold for a while, you don’t necessarily need to master how to read stock charts or do technical analysis. If Alibaba’s stock gains strength, holding on for a while could bring you big gains.
- Cons: Share-dealing can tie up your money for a long time, hindering your ability to make other transactions. If Alibaba’s stock starts falling after you buy, your patience might be tested through a nasty correction.
A contract for difference (CFD) is an investment derivative that lets you speculate on the price movement of an asset. Those assets can include contracts for foreign currency, commodities such as gold or oil, or stocks like Alibaba. When you practice CFD trading, you don’t actually own foreign currency, gold, or Alibaba shares. Instead, you’re temporarily holding a contract pegged to the short-term price movement of one of those assets.
- Pros: When CFD trading, you just have to put up a percentage of the total trade value, with the broker providing the rest (this is called leveraged trading). In leveraged trading, you make more on a winning trade than you would if you only ventured your own money.
- Cons: In leveraged trading, you also lose more than you would on a regular trade if Alibaba’s stock price goes down. CFD trading can incur overnight fees for trades that stay open for more than a day. Because CFD traders don’t have the voting rights and potential dividends that can come with owning shares, CFD trading is arguably less beneficial for trading stocks than it is for trading commodities,
The more you learn, the more likely you’ll be to make money when CFD trading Alibaba shares. Read our guides and courses on CFD trading to learn more. Ready to try CFD trading? Click on the links above.
How to buy, sell and trade Alibaba shares for beginners
Here’s what you need to know about the ins and outs of buying, selling and trading Alibaba stocks:
Buying Alibaba shares
When buying shares, you can do so through an online broker. Buying Alibaba shares is a viable strategy for a longer investing timeframe. Log into your online brokerage account, type the ticker symbol of the stock you want to buy (Alibaba’s is BABA), then click Buy. You’ll then own Alibaba shares.
You want to sell Alibaba shares at a higher price than your buy price. Still, there are different approaches to selling. One option is to hold for as long as possible, hoping to land the biggest possible gain. You could also sell your shares earlier, a good strategy if a bear market rears its ugly head.
When trading Alibaba shares, you can trade through a typical online brokerage. You can also use a CFD broker. If you choose a CFD broker, be aware of the risks that come with leveraged trading, and of the additional fees that CFD brokers often charge.
Our top tips for investing in shares of Alibaba
Now you have an overview of how to invest and buy Alibaba shares, let’s go over a few key points:
- Know your budget. Invest as much capital as you can afford to lose, and no more. Don’t go into heavy debt for the sake of trying out investments.
- Choose the approach that works best for you. Your investment strategy should be tailored to your investment goals and risk tolerance. Wait until you gain more experience before trying more complicated methods of investing and trading.
- Stick to a plan. Follow a thoughtful investing plan to increase your likelihood of success. Emotions such as fear and greed can push you into unwise investing decisions, but a cohesive plan can help prevent that from happening.
- Be ready to pivot if market conditions change. In a bear market, few stocks escape the carnage. Keep track of the market, and be prepared to adjust if you have to.
- Learn from your mistakes. Novice investors, professional money managers… everyone makes mistakes. Learn from those mistakes, and you’ll be better equipped to succeed in the future.
Unsure which platforms to use?
Still not sure how to proceed? Here are some more investing factors to consider:
- Budget size. If you have a budget of £1000 or less, you can simply buy a few Alibaba shares. If you have a larger budget (say, more than £10,000), more investment options become viable. Those can include CFD trading, day-trading, or buying more shares.
- Risk assessment. The more experienced you are, the better you’ll be able to handle investment risk. If you want to try a more complex strategy, you could opt to sell shares of Alibaba short, betting that the stock’s price will fall. If you want to stay conservative, you can always protect your investment on the buy side. Say you buy shares of Alibaba at $200. You can put in a stop-loss order at $180. That way, if Alibaba’s stock falls to $180, you automatically sell, and you don’t lose more than 10% on your investment.
- Market conditions. In a steep downtrend (a bear market), buying bonds and commodities can be safer than a growth stock like Alibaba. On the other hand, if the market’s doing well, you’ll have a better chance for success when you buy Alibaba shares. Follow the latest market news on our site to make the right investment decisions.
- Set your investing goals. Want to make money quickly? An approach like day-trading, in which you buy and sell shares on the same day, could be for you. Is your timeframe better measured in decades? You can buy a stock like Alibaba and then hold, betting on the company to succeed for years to come.
- Keep track of emerging trends. With new technology comes new investment opportunities. Alibaba has become a multinational powerhouse as it’s grown beyond its Chinese origins. If Alibaba successfully adapts to technological breakthroughs, that would bode well for its future.
What is Alibaba?
Alibaba is a multinational holding company that specialises in e-commerce, retail, and technology. Founded in 1999, Alibaba has expanded beyond one of the world’s largest online retailers. For more information on Alibaba, including charts, live prices, analysis, and more, see our Alibaba stock price page.
Try some of our stock market courses for beginners
Not quite ready to invest? Check out our site, where you’ll learn all about investment fundamentals from our educational courses. Learning the best investing and trading techniques will help to prepare you to buy stocks like Alibaba.