Summary: One of the most convenient ways to trade Amazon shares in Australia is with a reputable and regulated trading platform like Plus500, which lets you speculate on stock price movements, including those of Amazon, through Contracts for Difference (CFDs).
What is Amazon?
Amazon is a publicly traded company listed on the NASDAQ Stock Exchange under the ticker symbol AMZN.
How to trade Amazon shares in Australia: A step-by-step guide
Let’s delve into the step-by-step procedure for trading Amazon shares in Australia:
Step 1: Create a trading account
Begin by opening an account with a reputable trading platform.
We recommend registering with Plus500, a well-established and reputable platform licensed by the Australian Securities & Investments Commission (ASIC). On Plus500, you can trade Contracts for Differences (CFDs), derivative instruments that allow you to speculate on the price movements of an underlying asset without owning the asset itself.
Notable features of Plus500 include:
- Free demo accounts;
- Fast and reliable order execution;
- No commissions and tight spreads;
- Multi-asset CFDs on more than 2,000 financial instruments, including stocks, Forex, crypto, ETFs, commodities, and more;
- Mobile trading;
- Convenient deposit options via PayPal, Visa, Mastercard, etc.;
- Fast and secure withdrawals;
- Leverage of up to 1:30;
- Real-time quotes;
Recommended Multi-asset Broker for Online CFD Trading
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Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange
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Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more
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Low cost investing - No commissions and tight spreads.
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Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.
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Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals
Once you have decided on a trading platform:
- Sign-up: Visit the platform’s website and initiate the account registration process. You’ll be required to provide personal information, including your name, contact details, and often your financial background. It’s essential to accurately fill out the required fields;
- Identity verification: Most reputable brokerages adhere to Know Your Customer (KYC) and anti-money laundering (AML) regulations. As part of the verification process, you may need to submit identification documents, such as a passport or driver’s license, and sometimes proof of address, like a utility bill;
- Account security: Enhance the security of your trading account by enabling two-factor authentication (2FA) or any additional security features offered by the brokerage. This helps protect your account from unauthorized access;
- Deposit funds: Once your account is successfully registered and verified, you’ll need to fund it. Brokerages typically offer various deposit methods, including bank transfers, credit/debit cards, and online payment platforms. Choose the deposit option that suits your preferences and transfer the desired amount of money to your trading account;
- Familiarize yourself with the platform: Take some time to get acquainted with the trading platform. Explore its features, study stock market data, and understand how to execute orders.
Step 2: Trade AMZN
After successfully setting up and funding your trading account, follow these steps to start trading Amazon CFDs:
- Find Amazon: Within the trading platform, locate Amazon using its stock symbol, AMZN. Identify the CFD option among the available trading choices;
- Choose your position: Decide whether you want to go long (buy) if you anticipate Amazon’s stock price will rise or go short (sell) if you expect it to fall. Base this decision on your market analysis and trading strategy;
- Determine position size: Calculate the number of Amazon CFDs you wish to trade. Ensure that your position size aligns with your risk tolerance and the available capital in your trading account;
- Set leverage: Consider your preferred leverage, which allows you to amplify your exposure to Amazon stock. Leverage can enhance both potential gains and losses, so employ it judiciously;
- Implement risk management: Establish risk management measures, such as stop-loss and take-profit orders. These orders automatically close your position when Amazon’s CFD price reaches predetermined levels, helping you manage potential losses and secure profits;
- Execute your trade: Once you’ve determined your Amazon CFD position size, selected your position type (long or short), chosen your leverage, and set risk management parameters, proceed to execute your Amazon CFD trade. Confirm the trade on the brokerage platform, and the order will be processed in real time.
Step 3: Monitor your position
To monitor your Amazon CFD position effectively:
- Stay updated on Amazon’s stock price and market trends;
- Set price alerts for key levels;
- Use technical analysis tools;
- Stay informed about relevant news and events;
- Be aware of associated fees, such as overnight funding costs.
When you achieve your trading goals or decide to exit the trade, close your Amazon CFD position. Your profit or loss is determined by the price difference between when you opened and closed the position.
Additional fees
When engaging in CFD trading, it’s essential to be aware of specific fees that may apply to your trades, including:
- Overnight funding: If you hold a position beyond a set time;
- Currency conversion fee: Applies to trades in a different currency;
- Guaranteed stop order: Offers risk management but can widen spreads;
- Inactivity fee: Some brokers may impose an inactivity fee if your trading account remains unused for an extended period.
Amazon stock price today
Pros and cons of trading Amazon CFDs
Pros
- Leverage: CFDs offer leverage, potentially amplifying profits with less capital;
- Diversification: Speculate on Amazon’s price without owning the actual stock;
- Short selling: Profit from falling prices by going short in bearish markets;
- Hedging: Use CFDs to hedge against losses in your portfolio.
Cons
- Leverage risk: Magnifies both gains and losses, including potential losses exceeding your initial investment;
- Complexity: CFDs can be complex, requiring a learning curve.
- Fees: CFD platforms may charge various fees impacting profitability.
- Short-term focus: Typically involves short-term speculation, less suitable for long-term investors.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQ about how to trade Amazon in Australia
Can I trade Amazon shares in Australia?
Yes, you can trade Amazon shares in Australia through regulated platforms offering CFD trading services.
What are CFDs?
CFDs, or Contracts for Difference, are derivative instruments that allow you to speculate on an asset’s price movements without owning it. You profit from the price difference between the entry and exit points.
Do I need to own physical Amazon shares to trade them as CFDs?
No, you don’t need to own physical Amazon shares to trade them as CFDs. CFDs enable you to speculate on Amazon’s stock price movements without owning the actual shares.
What fees should I consider when trading Amazon CFDs?
Fees may include spreads, overnight financing fees, and, in some cases, commissions. Be aware of these costs, as they can impact your trading outcomes.
Where can I trade Amazon CFDs in Australia?
You can access Amazon CFD trading via trading platforms like Plus500.
How do I manage risk when trading Amazon CFDs?
Implement risk management strategies such as stop-loss and take-profit orders to limit potential losses and secure profits at specific price levels.
Is CFD trading suitable for beginners?
CFD trading can be complex and involves risks. It’s essential for beginners to have a good understanding of the markets and a well-defined strategy before trading.
Recommended Multi-asset Broker for Online CFD Trading
-
Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange
-
Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more
-
Low cost investing - No commissions and tight spreads.
-
Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.
-
Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals
