In this guide on how to buy Amazon shares in the UK, we will lead you through the process step by step, as well as provide you with info on the best brokerage for Amazon investments in the UK, the main reasons for investing in Amazon, and some common mistakes to avoid.
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What is Amazon?
Amazon.com, Inc. (Nasdaq: AMZN) is a US company that deals in online retail and offers a wide assortment of products. In addition to this, Amazon also commercially produces a range of electronic devices. A globally-recognized household name, Amazon was founded by Jeff Bezos in 1994 and is the second-largest company in the world by revenue as of May 2023, after Walmart (NYSE: WMT).
In early 2020, Amazon’s market capitalization hit the $1 trillion mark. Since going public in 1997, Amazon hasn’t paid any dividends to investors, channeling excess profits into further business expansion.
The company’s success is thought to be linked to its commendable efforts in customer support, a focus on innovations, and its offering of a wide range of products and services. Therefore, many investors in the UK decided they should buy Amazon shares and potentially profit from the company’s performance.
How to start investing in Amazon shares in the UK?
To begin with, how do you start investing in Amazon shares in the UK? The process is more simple than it might seem at first glance. The most convenient way is to enlist the help of an online brokerage.
Ultimately, you can always hire a professional to handle transactions if you find the process too intimidating. Investing in the stock market may seem intimidating at first, but with the right guidance and knowledge, it is a manageable task that anyone can undertake.
To begin investing in Amazon shares in the UK, it is crucial to understand the necessary steps to take. By following a clear and concise set of guidelines, one can approach the process with confidence and potentially reap the benefits of long-term investment. With that in mind, let’s explore the steps involved in investing in Amazon shares in the UK.
How to buy Amazon shares in the UK: step-by-step
The following step-by-step guide has all the necessities covered by straightforward instructions.
Step 1: Choose a broker
To buy Amazon shares in the UK, you need to register an account with a brokerage. As you can find numerous stock trading platforms online, it is not obvious which suits your style the most.
For example, does the platform support your preferred type of investment such as a long-term buy-and-hold approach or short-term day trading where you buy Amazon shares and then quickly sell?
Several key factors should be taken into account when evaluating brokerages:
- Fees: Brokerage fees include the costs brokers charge you for transactions and services. Naturally, you want these to be as low as possible or optimally commission-free, but you should never compromise too much with the other factors. Cheaper doesn’t always mean better;
- Security: Always rely on genuine, regulated, and safe third-party services. Make sure you check that the brokerage is licensed by relevant authorities such as the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA);
- Trading features and tools: Investing in Amazon shares doesn’t end with the purchase: you’ll want to monitor and manage your new financial assets. Look for platforms that provide the necessary tools to trade. You might also want to do additional reading on some of our investing guides;
- Market insights: Look for a platform that shares market insights and other relevant news and information. More extensive research tools and analytics charts that help you reach a conclusion with more confidence are even better.
Alternatively, skip the manual labor and opt for eToro. It ticks all the positive checkboxes from the list above and is a platform trusted by 30 million traders in various assets. If you buy Amazon shares in the UK with eToro, you get the following:
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Step 2: Fund your brokerage account
After you choose a brokerage, the next step is to fund the brokerage account. Depending on the selected platform, there will most likely be multiple payment methods.
In the case of eToro, you can use more than five different money transfer methods from the UK. Bear in mind that some of them are faster than others, so better plan accordingly.
Step 3: Do some research on Amazon’s performance
The stock market trade is a job that requires precise and thorough research. You have to have some notion of share price movement and trends before you invest and Amazon is no exception. Before you buy Amazon shares in the UK, check quarterly and annual earnings reports, stock exchange reports, and news about the company to feel the pulse and speculate in the right direction.
As a publicly traded company, Amazon has to maintain transparency about the way it conducts business. Within these publicly-available documents, you will be able to ‘feel the pulse’ of the business and estimate the direction of the price of Amazon shares. The giveaway information includes plans, current challenges, and financial results, but also global economic trends, inflation, chain of supply, and trends in the labor market.
Decide whether you want to invest only after you do the necessary research on Amazon shares.
Step 4: Determine the amount you want to invest in Amazon shares
If you’ve positively decided to buy Amazon shares, you need to decide how much.
A couple of factors can influence your decision. The first to consider is the prices of Amazon shares and the number of shares you wish to buy. If your starting budget prevents you from buying whole shares, you can consider fractional shares, an option supported by eToro.
Fractional shares allow you to obtain a non-whole number of shares, so you can end up with less or more than a whole share, depending on the money invested.
Note
Step 5: Place your order and buy Amazon shares
Once you’ve decided how much you want to buy Amazon shares, you’re ready to make your order and execute the trade. Log into your brokerage account, navigate toward the stocks and shares, find Amazon (AMZN), and make the trade. Depending on which one you pick, the order is complete within seconds, and your portfolio (if using eToro) should display that you’ve become a proud owner of Amazon shares. The types of orders that you can place include:
- Market order: This is a direct order and an instruction to purchase the stock at the current market price. It is usually instant, but is subject to availability;
- Limit order: A limit order is one of those trading features that help you buy Amazon shares at a price that you have designated. This order activates only if the stock hits the price that you specified. For example, if you think that Amazon shares will drop below £80, you can set a limit order to buy the shares if they reach that price or less.
- Options contract: Options speculation enables leveraged positions in a security at a portion of the cost of the asset. A ‘call’ option makes a profit for the trader if the stock price goes up, while a ‘put’ option generates profit if the stock price goes down. Bear in mind that derivative instruments can only be traded on a margin account and these usually require a higher minimum balance than regular brokerage accounts.
Step 6: Monitor your investments
Unlike diversified ETF portfolios that you can pretty much leave without care, investing in a single stock, even if it’s a blue-chip stock like AMZN, requires constant attention and frequent monitoring.
For example, if you buy Amazon shares in the UK, you will also want to monitor its competition, as well as the broader market by contrasting its performance against a benchmark index (usually S&P500).
In addition to this, you should pay attention to press releases, news reports, and other indicators of performance such as net income and revenue. Global market trends and isolated industry events can also have substantial influence, so re-check the status of your investment frequently, especially in cases of economic crises or boosts, disruptions in global supply chains due to pandemics or emergencies, etc.
Once you have a firm grasp of the situation, you will be able to conclude the future direction of your investment and whether to hold on, sell, or buy more.
Amazon share price today
Should I buy Amazon shares?
Gathering vital information about Amazon from news, reports, and releases constitutes a fundamental analysis. On the other hand, technical analysis helps evaluate a business and detect whether it’s favorable to nudge your asset in one direction by analyzing trends in price and chart patterns.
This tool shows analysis in real time for a given period. It’s invaluable for many traders as it condenses complex indicators like moving averages and oscillators into simple trading decisions you can make just by looking at the gauge.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in Amazon shares in the UK
Before investing in Amazon shares in the UK, remember that mistakes are common in day trading and investing. However, you can stick to certain guidelines to be safe from the most common mistakes and mistakes that you can easily prevent. Here’s the compilation of the 17 most common mistakes and advice on how to evade them, but something that you can typically expect when you enter the stocks and shares trading waters includes:
- Naively going into the stock market without sufficient research;
- Not setting a clear, objective-driven goal before making a trade;
- Attempting to time the market;
- Putting all your eggs in one basket (in this case, all your investment funds into Amazon);
- Losing reins on your emotions in the investment decision-making process.
Pros and cons of investing in Amazon shares in the UK
You’ll find a lot of factors that represent the positives and the negatives of investing in Amazon shares in the UK. While certainly not exhaustive, here’s the list of pros and cons that should guide your decision:
Pros
- Potential for high returns: Shares and stocks yield higher returns than more conservative assets such as bonds and savings accounts in the long term;
- Liquidity: Successful company shares are liquid, which means you’ll have no trouble selling them whenever the markets are open. In other words, for those who invest in shares, money can be readily available when needed;
- Ownership stake: Buying Amazon shares means you become an owner of a piece of Amazon. Shareholders hold the right to vote on relevant company matters, which means that you can influence the direction the company is heading towards;
- Diversification: Stocks are an excellent opportunity to diversify your portfolio. By investing in different assets and companies in multiple sectors, states, and of various sizes, investors can reduce their risk;
- Hedge against inflation: Despite an occasional downturn, the stock market has consistently shown a historical tendency of returns that beat inflation for a net-positive balance. The prime example of this is the average annual return of the S&P 500: the average yearly return in the past half a century has been 10.38%.
Cons
- High market risk: Share prices can be unstable and susceptible to sudden drops due to various factors. For example, local/global economic trends, politics, and company-specific events. They can deal a significant financial blow to investors;
- Time-consuming: Investing in Amazon company shares is a tasking job that requires a deep knowledge of the market, the company, and financial concepts in general. Those who trade in shares have to devote significant time towards research as well as portfolio management and rebalancing;
- No guaranteed returns: Stocks have no sure and guaranteed returns, unlike bonds or certificates of deposit. Your money is vulnerable at all times due to circumstances that display no signs before they show;
- Emotional factors: The dips and surges of the shares market are not for the faint of heart. Investors tend to get baited into panic selling and greedy buying, which are usually harmful;
- Potential for fraud: Frauds and scams can occur in the shares market despite the best efforts of regulatory authorities. Investors should always be on the watch for too-good opportunities that are often untrue.
Conclusion
Amazon is one of the most valuable brands in the world. It has survived the pandemic, achieved significant growth, and amassed value beyond competition. It has even joined the recent AI race, a display of readiness to innovate that is key to staying in the business vanguard.
On the flip side, investing in shares is never a 100% success. In fact, if you consider investing in Amazon shares, prepare yourself for financial loss or reconsider venturing into the stocks altogether.
The reality is, as always, in between. If you do proper research, maintain a thrifty outlook on things, and make sound decisions, the chances are you’ll do good by investing in Amazon shares.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to buy Amazon shares in the UK
Is Amazon a good company to invest in?
Amazon is considered by many to be a blue-chip stock, which usually means that it is among the more stable investments in the stock market.
Can you buy Amazon shares in the UK?
Yes, you can buy Amazon shares in the UK by relying on the services of a valid and regulated brokerage such as eToro.
How to buy Amazon shares in the UK?
There are several methods in which you can buy Amazon shares in the UK if you use eToro: market order, limit order, and options contract.
Is investing in Amazon shares safe?
Investing in shares is never 100% safe. However, you can minimize the risks if you carefully observe the instructions in this guide.
Can I sell my Amazon shares in the UK?
Yes, as stocks and shares are liquid investments, trading them for currency is done quickly.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
