How to buy BT Group shares (BT.A)

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Jul 6, 2023

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This guide will give you an overview of BT’s history since privatisation, a summary of its recent performance, and what to look out for if you’re interested in getting your hands on its shares.

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If you have all the information you need already, you can dive straight in by visiting one of our trusted brokers below. We’ve assessed all the best brokers and compared them so that picking the right choice for you is quick and easy. If you’re not ready to invest yet, keep reading for more information on BT.

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How to buy BT stock, a step-by-step guide

The process isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:

1. Choose a broker. You will need to find an online broker platform first. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in BT shares.
4. Place an order for BT.A stock. Search for BT’s ticker symbol (BT.A) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to buy and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your BT shares will be listed in your account. Congratulations, you’ve just bought shares in BT!

What is BT? And should I invest?

BT Group (LON: BT.A) is a British telecommunications provider, supplying broadband, fixed-line and mobile services. Originally state owned as British Telecom, BT was one of the first state-owned businesses to be privatised in 1984 and retains substantial responsibilities for providing telephone and broadband infrastructure in the UK.

Telecoms is a highly competitive industry, with fairly small margins and BT often has to deal with government intervention on top. BT must operate according to rules set by the regulator, Ofcom. BT is in the process of upgrading network infrastructure in preparation for a 5G rollout, a venture that requires constant, and heavy, capital investment.

A large capital outlay can eat into the amount shareholders receive in dividend payouts, while it also squeezes revenues. A hands-on regulator is another thing to consider as an investor, as it may take decisions that affect BT’s profit margins through price controls in particular. A new era of telecommunications, based on 5G networks, offers an opportunity and short-term investors might want to do a deeper technical analysis on the stock.

How has the company performed in recent years?

European telecoms companies have struggled in recent years and BT has been hit harder than most. A scandal in its Italian division along with significant debt obligations, a large pension deficit and the constant need for investment have combined to put pressure on the balance sheet. Since trading at highs around 480p in 2016 the price has been sliding, all the way down to briefly below 100p in autumn 2020.

In January 2017, BT revealed an alleged fraud at BT Italia, issued a profit warning and a balance sheet write-off that saw the stock plunge 20% in a single day. Not only has the stock failed to recover to the same level ever since but the repercussions – higher costs and a hit to BT’s overall global strategy – have lingered. 

BT has continued to invest heavily in infrastructure as well as to expand the business, by merging with the broadband provider EE and buying the rights to Premier League football. As yet, it hasn’t been able to fully address its balance sheet issues, which has been reflected in the share price.

BT suspended its dividend for the first time since privatisation in 2020, partly in response to the COVID pandemic but predominantly because of the level of infrastructure investment required over the next couple of years. The share price began to recover towards the end of 2020, not least because potential buyout talks valued its successful Openreach division at over £20bn, considerably more than BT’s market capitalisation. 

Is it a good time to buy BT shares now?

It could be if you have a long term view. Success relies on an increase in profits that will enable BT to pay down more of its debt and restart a dividend payout. There is potential in a widespread 5G network if BT is able to exploit it, while increased certainty in the aftermath of a Brexit deal also could offer opportunities for growth.

Ofcom will release its review of the whole British telecoms market in April 2021, and buyers should keep a close eye on that as it will dictate how much of a return BT is able to make on its investment in the network. Although Ofcom has promised to relax price controls, the review will hold much more detailed directions for the industry over the next five years and as such will have an impact on BT’s share price.

That review is something to look out for both for long and short term investors. The initial price control announcement gave a boost to BT.A, so the market may also respond to the full review, while it will set out a much clearer picture of what BT can expect over the next decade. You can follow all the latest BT news and market analysis below.

Buying, selling and trading BT shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before investing in BT shares.

1. Research the company. You should always examine the fundamentals of a company first. What is BT? How did the company get its start? How did it grow? Is BT’s revenue and profit growth picking up? Is the company innovating? The more you know about BT, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform.
6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade BT shares. Here’s a quick run-through of what’s involved in each.

Buying BT

This process involves finding a broker and placing an order to buy shares in BT as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling BT

When you sell any BT shares you have 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 a long time, hoping to benefit from the company growing steadily throughout. Or, if you see that BT’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 to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading BT

Trading is the same process as above, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade BT shares through buying and selling shares quickly yourself, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

• Can build wealth over time to achieve financial goals
• Don’t need to be very reactive to short-term market movements
• Some stocks will give you an income through regular dividend payments

Cons

• Takes a long time to realise any profits
• Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to flip stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into BT.A shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

• Can generate fast profits if you read the market right 
• Some platforms allow you to trade with leverage
• Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

• Trading with leverage is risky and can lead to big losses
• Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take one of our courses on the stock market and read our CFD trading guide to get you up to speed. 

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

• Range of stocks available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
• Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
• Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
• Payment methods available. You might want to get BT shares using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
• Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
• Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.