Planning to Buy Amazon Stock
if you are planning to buy Amazon stock you need to read this article. It will guide you about all you should know before buying.
December 30, 2020
Planning to Buy Amazon Stock? Here is What You Should Know Before Buying
You might have heard the name of Amazon for online purchasing of different products, but do you know you can become a shareholder of Amazon too. If you are an investor and want to trade stocks on Amazon this article is a complete guide for buying Amazon shares.
Overview of Amazon Company:
Amazon.com, Inc. is among the technology giants. Amazon was founded by Jeff Bezos on 5th July 1994. The company is based in Seattle, Washington. The company went public in 1997, after three years of its inception. The central focus of the company is e-commerce, artificial intelligence, digital streaming. Initially, the company was started selling the books online but later on extended to sell toys, electronic appliances, gadgets, video games, jewelry, and many more. Amazon is famous for its rapid product delivery. The major competitors of Amazon are Walmart, Best Buy, Costco, and target in the retailing industry. Apple, E-Bay, Netflix, Google, and Time Warner cable are its competitors in e-commerce. Its largest competitors are Microsoft, Alibaba, IBM, Oracle, and Google in cloud computing and artificial intelligence.
Net Worth of Amazon:
In August 2020, Amazon reported the second most valuable US company net worth of more than $1.7 trillion. The first valuable company is Apple. The company’s first IPO was $18 per share, and over the years, its share has increased to $88.
How to Buy Amazon Stocks?
Amazon is a large-cap NASDAQ listed company; its ticker on the NASDAQ exchange is AMZN. Like many other stocks, you can buy Amazon stocks through a brokerage platform.
Online Broker account:
All this process will be done in three steps.
Step 1: The first step is to determine how much you want to invest in the Amazon stocks.
Step 2: Once you determine your budget, then the next step is to Choose an Online broker. The only thing you should consider while choosing an online broker is that the broker can give you access to the NASDAQ exchange. Also, make sure that the broker fits you as well because some brokers are super expensive.
Step 3: After choosing a broker, the next step is to open an account. The account opening is a simple process, just like an opening online bank account. The account opens on the spot with some brokers, while some brokers do their background checks, and the account takes 3 to 5 days to open. But that shows high professionalism and ensures that your funds are in safe hands.
Which type of AMZN stocks can you buy?
Generally, you can buy stocks with these two execution options.
Market Order:
when you place the order (buy or sell the stocks) at the market price, it is called a market order. You can buy the Amazon stocks with a market order. For instance, the cost per Amazon share is $1000, and you buy 15 shares. Your total acquisitions will be 15,000 (1000*15), and you will also get a commission on it.
Limited Order:
Limited order is when you place the order at a certain limit. Like you set the maximum or minimum limit on which you want to buy or sell the stocks. The limit orders can only be executed if the market price of stocks reaches the limit.
Other Execution Options:
Apart from the market and limited order, you can buy Amazon stocks through:
Amazon Direct Stock Purchase Plan (DSPP):
In August 2019, Amazon launched DSPP, which means now you can purchase stocks directly from Amazon without any broker help. All you have to do is open an account with Computershare, and you are ready to buy and sell Amazon stocks, but you will have to pay transaction fees.
Mutual Funds:
If you want to play it safe and do not want to invest in Amazon directly, you can indirectly invest through mutual funds or ETFs. Mutual funds of Amazon can be bought from the S&P 500 index. Amazon is the third-largest company listed on the S&P 500 index.
The advantage of mutual funds is that you can have diversification of stocks. If Amazon does not perform well in one market, you can still have a positive return on other stocks’ investment.
Why Invest in Amazon?
If you still wonder why you need to invest in Amazon, then the answer is that Amazon e-commerce has accelerated in the global pandemic. Where all other businesses have suffered a significant blow, Amazon sales went up to 42%.
Amazon has introduced new ventures such as Amazon Web Services (AWS), Amazon Pharmacy, and Amazon food chain, making it an industry leader.
