How To Buy 3M Stock 2020
Welcome to Trading Brokers step by step guide to buying 3M stock in 2020. Here you will find an easy to understand explanation of trading 3M stock. This includes how to buy 3M shares online, what you need to trade 3M stock and how to open a trading account with a stock broker so that you can buy 3M stock online today.
Maybe you have heard of buying 3M stock online or through a friend. Perhaps you are looking to trade and are curious about the different options available to you. Whether you are looking to speculate, invest or just learn more, this guide on how to buy 3M stock can help you along your journey.
Overview of 3M
3M Co. (MMM), founded in June 1902, is a multinational conglomerate engaged in developing and marketing a range of products related to safety, health care, and energy among many others.
Saint Paul, Minnesota-based 3M turned into a billion-dollar company through continued investments in scientific and technical innovations. It currently produces more than 60,000 products that are used in industries ranging from different businesses and educational institutes to hospitals and homes.
3M runs business operations in 70 countries and sale operations in 200. It mainly operates through four key segments.
Safety and Industrial
The segment produces a wide range of products such as safety, adhesives, tapes, masking systems, roofing granules among many others. The segment accounts for majority of the company’s overall sales.
Transportation and Electronics
The unit comprises a suite of products and services including electronics, electronic materials solutions, aerospace, automotive, commercial solutions, transportation safety etc. This is the second biggest segment of the company in terms of revenue.
The company’s health care segment is engaged in offering products and services related to medical and surgical tools, skin health, oral care, infection prevention, food safety, and purification sciences, among others.
3M’s consumer business comprises products related to home improvement, home care, office supplies, stationary etc. The segment is the smallest in terms of revenue generating capabilities.
Growth prospects of 3M
3M has a diversified portfolio that is both beneficial and risky at the same time. The company does not specialize is one category and its wide range of products and services makes it resilient in the face of a major change in any one industry. However, to serve multiple industries and maintain its market share, it comparatively needs to work much harder to make sure its products are relevant and updated.
Moreover, the company is subject to any major change in the markets it serves, besides facing competition from numerous rivals due to its diversified products range. In short, 3M’s products and services must stay relevant and updated, if it wants to continue its growth in the years to come.
Research and development
The company has poured a huge amount of money into research and development (R&D) activities since its inception that helped it to gradually grow into a successful multinational conglomerate. It has been producing innovative products for different industries, mainly due to its R&D efforts. So, we can say that the success of 3M in future pretty much depends on the innovativeness and relevance of its products.
The R&D spending enables 3M to produce innovative products that stand out from the rival’s goods in the market. This allows the company to sell its products at higher prices even with increasing volume. The company is expected to continue increasing its profit in the coming years if it successfully maintained its pricing power. On the other hand, if it failed to maintain the quality and uniqueness of its products, its growth may be expected to slow down.
Investing in 3M
Investing in 3M stock is when you buy 3M shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy 3M stock in order to try and make a profit when the 3M stock price increases in value.
Trading 3M stock
Trading 3M stock is when a trader speculates on the movement in the 3M stock price without actually owning the shares in 3M. Traders tend to buy and sell 3M stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell 3M stock online through various methods including spot markets, futures contracts, options contracts, spread bets, CFDs (contracts for differences) and ETFs (exchange-traded funds).
One of the most popular ways to trade 3M stock is via CFDs (contracts for differences). When trading 3M CFDs, you do not actually invest in 3M shares, meaning you are not tied to them. You are only speculating on the rise or fall of the 3M stock price. A CFD is a financial contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.
A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with their own personal objectives. Traders would open long (buy) positions, if they think the stock price of 3M will rise or short (sell) positions if they thought that the 3M stock price will fall. The difference in price between the entry and exit price is the traders realised profit or loss, excluding any broker commission and fees.
For example, if you think 3M shares are going to increase in price, you could buy a share CFD on the company. You will exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares increase in price and making a loss if they decrease in price.
On the contrary, if you think 3M shares are going to decrease in price, you could sell a share CFD on the company. You will still exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares decrease in price and making a loss if they increase in price.
Futures contracts are an agreement to buy or sell a specified asset at a certain date and price. 3M investors can use futures trading to speculate on the price movement of 3M stock in order to try and make a profit. Traders would look to go long (buy) a futures contract if they believe the price will rise or short (sell) a futures contract if they believe the price will fall. The difference in price between the price at the start and expiry date of the futures contract is the profit or loss from the contract.
3M spread betting
Spread betting is a financial derivative that enables traders to speculate on 3M stock falling or rising without taking ownership of the underlying asset. If the trader makes a correct prediction and the asset does move in that direction, they could make a profit, minus any broker fees. On the other hand, if the price moves against their prediction, they would incur a loss.
Financial spread betting is similar in ways to CFD trading except that you are betting a fixed amount per point on the 3M stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
3M options are financial instruments that are derivatives based on the value of 3M’s stock. Traders usually enter into calls when they expect the price of the underlying asset to increase, and puts when they expect the price to decrease. Option contracts come with an expiration date before which the holder needs to exercise their option to buy or sell an underlying asset at an agreed-upon price. The stated price on an option is known as the strike price.
Buyers can choose to exercise their calls and puts or not whereas sellers are obligated according to the buyer decision. Therefore, the sellers (writers) can be exposed to more risk than buyers whose losses can be limited to the premium paid for the contract in the instance they do not exercise the contract. On the other hand, sellers could lose more depending on the 3M market price.
Exchange Traded Funds (ETFs) enable traders to invest in a basket of securities that trade intraday like individual stocks on an exchange, and are typically designed to track the performance of an existing market or group of markets.
Each ETF is usually focused on a specific sector, asset class, or category. ETFs can be commonly used to help diversify an investment portfolio and create a mini-portfolio, or, for the active trader, they can be used to try and take advantage of price movements.
3M is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside 3M, may consider ETFs.
Where to buy 3M stock?
Stock trades are processed via a stock exchange, where a stock broker represents each investor. The majority of investors will nowadays use an online stock broker to buy and sell stocks through a stock trading platform which will enable them to connect to the stock exchange. You can see a selection of our best stock brokers below with whom you can open a trading account to trade stocks online.
ASIC, BVI, CBI, FFAJ, FSA, FSCA
Min $100 Deposit
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF
Min $250 Deposit
ASIC, FCA, DFSA, SCB, CySEC
Min $200 Deposit
ASIC, CySEC, IFSC
Min $5 Deposit
Why trade 3M stock?
Trading the stock market has become a popular investment activity for many people, especially with the technology that we have these days making it more accessible than ever. There are a vast number of trading brokers, trading platforms and trading apps available for buying and selling 3M stock with relative ease. The cost involved to get started makes trading 3M stock accessible to traders of all experience levels from across the globe.
The availability of leverage has also contributed towards the increase in aspiring traders. Leverage allows traders to hold a position size greater than they would have been able to without it. E.g. An account balance of $1,000, could take a position size of $5,000 with 1:5 leverage. Whilst this can increase potential profits, it also greatly increases risk. It is therefore of the upmost importance that you have a clear understanding of the significant risks involved with online trading, especially when using leveraged positions.
The majority of traders would look to buy and sell 3M stock to try and earn profit from the variation in 3M’s stock price. When trading 3M CFDs you can speculate long and short on prices rising or falling without actually needing to invest in 3M shares. This can make it a more convenient trading method for anyone who has a trading account with an online broker. Alternatively, long term investors may purchase traditional shares in 3M’s stock for a more long-term hold.
Buying 3M stock can also be a way to diversify a trading portfolio and to hedge against shares in other stocks or investments in other asset classes such as forex, commodities, precious metals and cryptocurrencies.
However, before investing in 3M, it is important you understand the dynamics that affect the 3M stock price.
How to trade 3M stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade 3M stock online. Here is a summary of the key steps:
1. Decide if trading 3M stock is for you
Trading 3M stock online carries an element of risk and can take more time than other forms of investing. You will need to research the company, manage your positions, follow market news and decide how to react to it. It is important to understand the risks and dedication that comes with trading 3M stock online.
2. Educate yourself
Before trading 3M stock, it is imperative to learn as much as possible about investing and trading online. Any mistake could prove to be costly. There is an abundance of free educational materials provided by many online brokers that can help you to improve your trading skills and knowledge.
Most brokerages will also provide a free demo trading account so that you can practice trading 3M stock online with virtual funds in order to familiarise yourself with the trading platforms and practice your trading strategies until you feel confident enough to open a real trading account.
3. Choose a 3M stock broker
In order to trade 3M stock online, you will need a broker account and trading platform to execute your trade positions through to the market. When choosing a broker, there are a few important things to consider such as regulation, commission fees, platforms, tools, education, funding options and customer support.
If you do not have the time to research brokers, you can see a list of our best brokers that we have already prepared to help traders. If you would like to know more, you can also view our detailed guide on how to choose a trading broker.
4. Research 3M
If you have made it this far then you may be ready to start trading 3M stock online! The next step is to research 3M to help increase your knowledge in the company. The best brokers should have this information conveniently displayed for you within their trading platform.
5. Have a trading plan
Some of the most important factors that can help determine 3M stock trading performance can be the trading plan and discipline. It is important to have a solid trading plan personalised to your own needs that includes the money management and trading strategy that you will use. Most experts and professional traders would try to not let negative emotions such as fear, anger and greed affect their trading strategy.
6. Buy and sell 3M stock
Once you feel ready to trade 3M stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on 3M, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of 3M trades for the long-term, whereas traders may buy and sell 3M stock on a daily basis.
Is trading 3M stock right for me?
Trading 3M stock is a popular choice for long-term investors and active traders. It can be suitable for scalping, day trading and swing trading. Traders who would usually trade forex, trade indices, trade commodities, trade cryptocurrency, may look to diversify their portfolio.
However, it is important to understand the significant risks involved with trading 3M stock online, especially when using leveraged positions. Most experts would suggest trading on a demo account with virtual funds to begin with.
This can be a useful way to familiarise yourself with how to trade 3M stock and using trading platforms whilst allowing you to practice your trading strategies until you feel confident and produce consistent results. Most stock brokers provide unlimited demo accounts free of charge.
Not sure which 3M broker to trade online with?
If you are still unsure which 3M stock broker is the best for you to trade online with then you can use our free online broker comparison tool to quickly compare brokers based on regulations, minimum deposit, leverage, spreads, commissions, funding options and more. You can also read our broker reviews and choose from our best brokers, best trading platforms, best social trading platforms and best trading apps. If you would like to look for the best trading brokers in a particular country, we have pages dedicated to our best brokers USA, best brokers UK, best brokers Australia, best brokers South Africa and best brokers Canada.
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