Interested in buying Facebook shares? Your instinct could prove to be hugely profitable but, before you take the plunge, it’s a good idea to equip yourself with a solid understanding of the stock market and make sure those your instincts are well founded. We’ve produced a variety of stock trading news, market analysis and educational articles, including this page, to help you on the path to becoming a savvy investor.
Compare the best platforms to invest in Facebook shares
Ready to buy Facebook shares? Click on the links below to find the online broker that best suits your needs. Our helpful guides explain all the best investment choices and how those investment choices work.
Trade Facebook shares, right now
If you’re not interested in long-term investing, trading shares in Facebook might be a better option. Trading entails trying to land shorter-term profits by buying and selling Facebook shares in a short amount of time, sometimes on the same day. We’ve posted reviews for the best online brokers that make frequent trading easy.
How to buy Facebook stock in 7 simple steps
Making money from stock investments takes research and patience. You’ll want to evaluate both the company and the stock before buying Facebook shares.
If you’re new to investing, consider limiting your budget when buying Facebook stock online. As you get the hang of investing you can opt to invest more money, or try more sophisticated trading methods. Here’s a quick checklist to peruse as you consider buying shares in Facebook:
- Know the company. What is Facebook? How did the company start out? How did it become the multinational power it is today? When it comes to sales and earnings growth, how is Facebook doing? Is the company still aggressively innovating? The more you know about how Facebook operates, the better positioned you’ll be to make sound investment decisions.
- Learn the basics. You can start by learning the terminology that comes with buying shares in stocks like Facebook. Make sure you’re familiar with basic terms like bid price, ask price, revenue growth and earnings growth. You’ll also want to learn the different ways you can invest in Facebook, including share-dealing and trading and contracts for difference (CFD) trading .
- Share-dealing vs Trading. When share-dealing, you’re simply buying Facebook shares. There are two ways to make money when share-dealing. Firstly, you can sell shares at a higher price than the price at which you bought those same shares. Secondly, you can collect dividends, assuming it’s a company that issues dividends. Trading is a shorter-term approach to investing, which can include buying and selling Facebook shares on the same day (day trading). When you day trade shares in Facebook, you’re more interested in the stock’s chart than you are Facebook’s long-term future.
- Establish your budget. When you first start investing, consider going with a smaller budget. That budget could be £1000, or less. Facebook’s stock currently trades around $200 a share, meaning you could buy a few shares with a £1000 investment. As you gain experience, you can choose to venture larger sums of money.
- Choose a broker that works for you. Plenty of brokers will provide a platform to buy Facebook shares but not all brokers are made equal. Find a broker with an easy-to-use trading platform, strong reputation, and low fees.
- Analyse market conditions. When the stock market takes off over a period of months or years (a ‘bull market’) many individual stocks do the same. When the market turns ugly (a ‘bear market’), most stocks fall. It’s usually wise to take heed of broader market conditions.
- Make your first investment. You’ve done your research. You have a better understanding of Facebook’s business, as well as the basics of investing in stocks. You know what your budget is. You’ve found a reliable broker. You’ve checked to make sure that the stock market is doing well… It’s time to invest! Log into your online brokerage account, type in Facebook’s ticker symbol (FB), make sure that the price the stock is trading at isn’t too high, then hit the Buy button. Within seconds, you’ll own shares of Facebook.
Ways to invest in Facebook; share-dealing vs trading
There are multiple ways to buy, sell, and trade shares in Facebook online. Here’s a couple:
When share-dealing, you are buying Facebook shares. Share-dealing is a longer-term strategy compared to trading shares in the hopes of a quick profit.
- Pros: Since you’re not betting on short-term price swings, you can devote less energy to learning how to meticulously read stock charts. If Facebook’s stock starts going up, holding for longer could eventually bring you a big gain.
- Cons: Share-dealing often ties up your money for a long time, which might stymie further investment plans. If Facebook’s stock fizzles soon after you buy, you might have to sit through a nasty correction in price or cut your losses.
A contract for difference (known as a CFD) is an investment derivative that allows you to speculate on the price movement of an asset. Those assets could include contracts for foreign currency, commodities such as gold or oil or individual stocks like Facebook. When you engage in CFD trading, you don’t own foreign currency, barrels of oil or Facebook shares, but rather a contract pegged to the price movement of those assets.
- Pros: When you practice CFD trading, you only need to put up a percentage of the total trade value. The broker will provide the rest (a practice called leveraged trading). When you trade with leverage you make a higher-percentage return on your trade than you would if you only ventured your own money, assuming the stock goes up.
- Cons: While leveraged trading will give you a bigger gain if Facebook’s stock price goes up, you also stand to lose more if Facebook’s stock price goes down. Also, if you leave a leveraged CFD position open for more than a day you’ll likely have to pay overnight fees. You’ll lose the voting rights and potential dividends that can come with owning shares if you opt for CFD trading instead of actually buying shares.
The more knowledge you acquire, the more likely you’ll be to find success when trading a contract for difference on Facebook shares. Read our guides and courses to learn more about CFDs. If you’re ready to try CFD trading, click on the links above.
How to buy, sell and trade Facebook shares for beginners
Considering investing in Facebook stock and shares? Here’s a summary of what you need to know:
Buying Facebook shares
Buying Facebook shares usually involves using an online broker. This investing approach makes sense for investors who want to hold onto a stock for a longer period of time. Log into your online brokerage account, type in the ticker symbol of the stock you want to buy (Facebook: FB), then click Buy. You now own Facebook shares.
Typically, you want to sell Facebook shares at a higher price than your buy price. That said, there are different approaches to selling. One option is to hold for as long as possible, hoping to achieve the biggest possible gain. Alternatively, you could sell your shares earlier – an especially prudent strategy if a bear market starts to take shape.
Trading Facebook shares also invites more than one possible approach. You can choose to trade through a typical online brokerage or you can use a CFD broker if you’d rather try your hand at CFD trading. If you choose a CFD broker, recognise the risks that come with leveraged trading and know that CFD brokers can charge additional fees.
Our top tips for investing in shares of Facebook
You now have an overview of how to invest in Facebook’s stock. Let’s go over a few key points:
- Know your budget. Only invest as much capital as you can afford to lose. It makes no sense to go into heavy debt while chasing investments.
- Choose the approach that works best for you. You want your investing strategy to fit with your investment goals and your risk tolerance. You can try out more complex methods of investing and trading once you gain more experience.
- Stick to a plan and don’t let emotions push you around. Follow a thoughtful investing plan to increase your likelihood of success. Emotions like fear and greed can push you into unwise investing decisions if you let them.
- If market conditions change, be ready to react. A bear market can whack even the most attractive growth stocks. Keep tabs on the shape of the broader market and be prepared to adjust your strategy if need be.
- Learn from your mistakes. Everyone makes mistakes, from novice investors to professional money managers. Learn from those mistakes and you’ll be better equipped to make the right call the next time.
Unsure which platforms to use?
Still have questions? No problem. Here are some factors to consider as you consider making your first trade:
- Budget size. If you have a budget of £1000 or less, you can simply buy a few Facebook shares. If you have a larger budget (more than £10,000, say) further investment options become available, including day-trading, CFD trading, or buying more shares.
- Risk assessment. The more experience you acquire, the better you’ll be able to deal with investment risk. Once your expertise grows, you can try different strategies. One such strategy, if you lose faith in Facebook’s stock, is to sell shares in Facebook short. When you short-sell shares of a stock, you’re betting that the price will fall. If that sounds daunting might instead choose to protect your investment on the buy side. Say you buy shares in Facebook at $200 per share. You can put in a stop-loss order at $180. That way, if Facebook’s stock starts falling and hits $180, you’ll automatically sell at that price and won’t lose more than 10% on your investment.
- Market conditions. In a steep downtrend (also called a bear market), buying assets like bonds and commodities can be safer than buying growth stocks like Facebook. But if the market’s doing well you might decide to take advantage by buying shares in Facebook. Follow the latest market news on our site to make informed decisions.
- Set your investing goals. Want to make money quickly? Faster-moving trading techniques such as day trading (buying and selling shares on the same day) could be for you. Thinking 20 years down the road? Then you might be better off choosing to buy Facebook shares and trusting that the company will flourish as the years go by.
- Monitor emerging trends. New technology breeds new investment opportunities. For instance, Facebook is planning to enter the red-hot cryptocurrency space, launching its own digital currency (Libra) in 2020. Keep an eye on Facebook to see if the company produces more new opportunities. For the leading technology companies, the prevailing mantra often boils down to this: innovate or die.
What is Facebook?
Facebook is the world’s largest social media and social networking site. Founded in 2004, Facebook has amassed a huge revenue stream from digital advertising and other forms of data services. For more information on Facebook, including charts, live prices, analysis, and more, visit our Facebook stock price page.
Try some of our stock market courses for beginners
Not quite ready to invest in Facebook? Take a stroll through our site, where you’ll learn all about investment fundamentals with the help of our easy-to-understand educational courses.