How To Buy Adobe Stock
Welcome to Trading Brokers step by step guide to buying Adobe stock. Here you will find an easy to understand explanation of trading Adobe stock. This includes how to buy Adobe shares online, what you need to trade Adobe stock and how to open a trading account with a stock broker so that you can buy Adobe stock online today.
Maybe you have heard of buying Adobe 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 Adobe stock can help you along your journey.
Overview of Adobe
Adobe Inc. is a multinational company that produces software products. The headquarters of the company is located in San Jose, California.
In December 1982, former Xerox employees Charles Geschke and John Warnock founded Adobe in the garage of John Warnock. The company was named after Adobe Creek, a stream flowing in the backyard of Johan Warnock’s house in Los Altos, California.
The company turned profitable in its first year of operations when Steve Jobs purchased a five-year license of PostScript, the company’s first software product for computer printing. The most notable software products of the company include:
- Adobe Photoshop
- Adobe Lightroom
- Adobe Illustrator
- Adobe Acrobat
- Adobe Indesign
- Adobe Premiere Pro
- Adobe After Effects
- Adobe Animate
- Adobe Flash
The company’s Adobe Experience Cloud platform provides marketing management solutions to its users and includes advertisements, marketing automation, audience management, order management, customer management, etc. The company’s competitors include Apple, Corel, Autodesk, Microsoft, Google, Oracle, SAP, etc.
Adobe Inc. Stock
The stock of Adobe Inc. trades on NASDAQ with the symbol ADBE. Adobe’s stock is a component of NASDAQ-100, S&P 100, and S&P 500. Adobe Inc. conducted its IPO on August 20, 1986, at a share price of $11. The company’s share price has broken the $450 barrier in July 2020.
What moves the stock price of Adobe Inc.?
The price of Adobe Inc.’s stock moves in reaction to different factors that you, as an investor, should know to correctly predict the possible movement of stock. In this section, we will enlist some of these factors:
Growth in business segments
The company’s business is divided into three segments: digital media, digital experience, and publishing. The company’s digital media segment generates up to 70% of the total revenues. The digital experience segment generates up to 25% while the publishing segment generates 3% of the total revenues. Therefore, small changes in the revenues from digital media and digital experience segments can have a big impact on the company’s revenue and profitability. Growth in any of the business segments will lift the price of its shares upwards and vice versa.
New Acquisitions and Products
New acquisitions and introduction of new products by Adobe Inc. to expand the company’s revenue and subscribers can help catapult its stock price. Adobe has a long list of products and is continuously improving its products by releasing its new version every year with innovative features. The company acquired different companies as part of its expansion plan. Therefore, a new acquisition or launching a new product can boost the company’s revenues, resulting in the stock price going higher.
Due to the low barriers to entry and the continuously evolving customer needs, competitors are vying for market share and offering low-cost alternatives to Adobe. While Adobe products are state-of-the-art and complex, many other competitors are offering simplified and automated products meant for novice users. Therefore, an innovative and ground-breaking product from a competitor can badly impact the subscription revenue of Adobe and hit its revenue and profitability, ultimately disturbing the share price.
Financial Results and analysts’ estimates
On the day of the earnings announcement, the price of the stock moves wildly in response to the estimates and expectations. If the financial results of a company surpass the expectations and estimates of the analysts, the stock prices experience a jump. Conversely, a below-average financial result that is below the expectations and estimates of the analysts can slide the stock price downward. Therefore, you must thoroughly study the financial results of the company to gain a better understanding of the stock price.
Stocks sometimes follow certain patterns that are visible on price charts and the crucial areas of support and resistance can be determined using technical analysis. Sometimes, a stock follows a trend that one can confirm using price charts and technical analysis. You can analyze the future movement of Adobe’s stock using technical analysis as well.
While many other factors also impact the price of Adobe stock, the above-mentioned factors can give you some insights into the movement of Adobe stock. You will be able to clearly explain why the stock moved higher or lower after you study the factors mentioned above.
Investing in Adobe
Investing in Adobe stock is when you buy Adobe shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Adobe stock in order to try and make a profit when the Adobe stock price increases in value.
Trading Adobe stock
Trading Adobe stock is when a trader speculates on the movement in the Adobe stock price without actually owning the shares in Adobe. Traders tend to buy and sell Adobe stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell Adobe 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 Adobe stock is via CFDs (contracts for differences). When trading Adobe CFDs, you do not actually invest in Adobe shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Adobe 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 Adobe will rise or short (sell) positions if they thought that the Adobe 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 Adobe 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 Adobe 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. Adobe investors can use futures trading to speculate on the price movement of Adobe 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.
Adobe spread betting
Spread betting is a financial derivative that enables traders to speculate on Adobe 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 Adobe stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
Adobe options are financial instruments that are derivatives based on the value of Adobe’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 Adobe 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.
Adobe is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Adobe, may consider ETFs.
Where to buy Adobe 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 an account to trade stocks online.
ASIC, BVI, CBI, FFAJ, JFSA, FSCA, IIROC, ADGM FRSA
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, BaFin, CMA
Min $200 Deposit
ASIC, CySEC, IFSC, DFSA
Min $5 Deposit
Why trade Adobe 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 Adobe stock with relative ease. The cost involved to get started makes trading Adobe 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 Adobe stock to try and earn profit from the variation in Adobe’s stock price. When trading Adobe CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Adobe 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 Adobe’s stock for a more long-term hold.
Buying Adobe 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 Adobe, it is important you understand the dynamics that affect the Adobe stock price.
How to trade Adobe stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Adobe stock online. Here is a summary of the key steps:
1. Decide if trading Adobe stock is for you
Trading Adobe 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 Adobe stock online.
2. Educate yourself
Before trading Adobe 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 Adobe 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 Adobe stock broker
In order to trade Adobe 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 Adobe
If you have made it this far then you may be ready to start trading Adobe stock online! The next step is to research Adobe 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 Adobe 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 Adobe stock
Once you feel ready to trade Adobe stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Adobe, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Adobe trades for the long-term, whereas traders may buy and sell Adobe stock on a daily basis.
Is trading Adobe stock right for me?
Trading Adobe 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 Adobe 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 Adobe 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.
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