Amazon Trading: Everything You Need to Know

June 28, 2022
Written by Jayce Broda
trading

Amazon's rise from its bookstore beginnings to its current retail dominance has been nothing but impressive. What started as a humble garage project became a billion-dollar e-commerce enterprise. As of writing, the retail giant has over 310 million customers worldwide. That number will continue to grow as more people shop online, and judging by its convenience, online shopping is not stopping anytime soon.

Aside from being an e-commerce powerhouse, Jeff Bezos' Amazon also has a trading platform. Amazon trading is under the "AMZN" ticker on the NASDAQ exchange. While it primarily dabbles in retail e-commerce, it also operates in other industries, such as cloud computing, digital content, and consumer electronics. This article will discuss everything you should know about trading on the platform.

Where to Begin on Trading

Before we go into the discussion, let's first cover the trading basics. This will give you some necessary background as the discussions get more specific.

For beginners, trading can be quite intimidating. So, where do you even begin? Here are the necessary steps first-time investors should take:

1. Do your homework

Trading is a risky undertaking and is not for the faint-hearted. However, investing money is not something people do on a whim, and earning that back will be quite the challenge.

So before you attempt to begin trading, we recommend researching and consulting with Amazon stock experts, especially if you don't have the proper knowledge of the share price. If you have questions, this step would be the perfect time to ask them.

Research does not stop at the consultation; you'll have to do some of it yourself. If you're planning to make an investment in a company, look up its history, net revenue, market cap, management, and earnings. Stock research is a valuable skill to have if you want to invest in the long haul of fractional shares.

2. Decide how you’ll invest your money

Investing money does not come in a one-size-fits-all method. These are some options you can choose from:

• Choose stocks and fund them by yourself

Do you want a hands-on approach? Then, we suggest you learn the ropes on your own.

• Let the professionals do the trade

If you prefer having someone else manage your investments, get a seasoned expert to do the job. Of course, the person should be competent enough to run things; this involves money.

• Invest in your employer’s 401(k)

For the unaware, a 401(k) is a plan employers offer that packages retirement savings and investments. Many beginners start their investments through this option because of its tax advantages. A good thing about this type is that investors get to learn effective investing practices, such as making small yet consistent contributions.

3. Seek out a reliable online broker

First-time investors can always benefit from an online broker's expertise and option. In addition, having one on your side makes it easier to access NASDAQ, especially if you're planning to invest in a publicly listed company.

Investors should pick online brokers that align with their needs and goals. Not every broker allows clients to open accounts with them, and they sometimes offer expensive rates. Take notes on their rates, accessibility, and trading platforms.

4. Open an investing account

If you’re 100% decided on investing, now’s the time to open an account for that. Investors who adopt a hands-on approach prefer brokerage accounts because they’re quick and affordable. It usually takes around 15 minutes to set one up, much like a savings account.

5. Have a budget in place

Should you be a millionaire to start investing in a company? The answer is no. However, how much money is enough to get things started?

If you want to buy individual stocks, look at the share prices of your desired investment/s. Prices range from a few to a few thousand dollars, so check them frequently in case of changes. This should help you set a budget when you're ready to purchase stocks.

Are you planning to use mutual funds? That's alright, especially if you have a tight budget. However, if you're pondering this option, go for an exchange-traded fund (ETF), which works similarly to a mutual fund. In this case, an ETF tracks a specific index or other assets, which can be sold or bought on a stock exchange, just like a regular stock. 

Did you know that most financial advisers prefer investing through funds? If an expert recommended this, you might want to take that suggestion. This option allows investors to allocate a significantly large portion of their portfolios to stock funds, especially for long time windows. 

Keep your investments small if you're just planning to buy individual stocks. This practice makes investment management easier.

6. Go for long-term investments

While this depends on you, going for long-term stock market investments is never a bad idea. It's always a good call because investors can always count on the 10% yearly stock return average regardless of day-to-day or year-to-year events.

7. Check your investment/s from time to time

Going over daily fluctuations won’t change things much, but there will be times when investors need to check on their stocks. Your portfolio/s and investment goals should align with each other to avoid mismanagement.

amazon store

How to Go About Amazon Trading

Understandably, the idea of investing in a Big Four powerhouse like Amazon can seem far-fetched, especially for beginners. Who wouldn't be intimidated by its size and status? 

However scary this is, investors like yourself have to start somewhere. And fortunately, buying Amazon shares online isn't a crazy idea anymore nowadays. So if you're brave enough to do it despite the risks, go for it! Amazon's continuous ascent despite the pandemic should encourage you.

Every investor has a reason for investing in a company. If you've found your reason to invest in Amazon, that's great! You're putting your well-earned money into a company that clearly knows what it's doing, as evidenced by its success. But the question is, how do you do just that?

This section will walk you through the necessary steps to trading on Amazon. At this point, you should have already done the steps in the previous section. However, if you want to add other companies to your list of investments, this process remains applicable since they're similar.

• Check Amazon’s stock price

Before buying stocks, don't forget to answer the "what is Amazon trading at" question. First, check the company's current stock price to see if it fits your budget. We've already discussed its importance earlier, so make sure yours is enough to cover your expenses and savings, along with your stock purchase. If it doesn't fit, ask your broker if they allow you to buy portions of individual stocks.

• Get your trading account up and running

Reaching this point means that you’ve already got your trading/brokerage account set up. This is where you’ll buy and store your shares. 

This step is where you’ll deposit your money for the stock splits. Buyers can send cash through debit cards or electronic wallets. Much like the account setup, the deposit will only take a few minutes to complete.

• Buy the share

When you’ve got everything ready, now is the time to finally buy the share. Simply log in to your brokerage account, look for “Amazon share,” and state the number of shares you want to buy. From there, click the “Buy” button to begin the purchase.

• Monitor your investment’s performance

The work doesn’t stop at buying. As stated earlier, keep a watchful eye on your investments, regardless if you’re a short- or long-term investor. Whatever strategy you use, try your best to follow it through until you’ve reached your investment goals. You can ask for help from Amazon stock experts and other professionals for effective monitoring advice if you believe you need more assistance.

Final Thoughts

For beginners, trading on Amazon is taking the (investment) plunge. It's unfamiliar and unpredictable, but the payoff is worth the risk, especially with the proper guidance. If you want to go for it, follow the pointers above to start you on the right path and stray from bad practices like Amazon insider trading. 

If you have more questions or clarifications about this article, feel free to message us at [email protected] We'll be pretty happy to hear from you and start a conversation. 

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