How To Buy AMD Stock
Welcome to Trading Brokers step by step guide to buying AMD stock. Here you will find an easy to understand explanation of trading AMD stock. This includes how to buy AMD shares online, what you need to trade AMD stock and how to open a trading account with a stock broker so that you can buy AMD stock online today.
Maybe you have heard of buying AMD 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 AMD stock can help you along your journey.
Overview of AMD
Advanced Micro Devices Inc. (AMD), founded in 1969, started its journey with a handful of employees. Initially, the company focused on leading-edge semiconductor chips and gradually turned into a key player in the semiconductor space over time.
The Santa Clara, California-based company now develops high-quality computing and visualization products to address some of the toughest problems of the modern world. The company believes it is ready to solve the up-coming challenges with its high-performance computing and graphics solutions.
AMD offers a wide range of products designed for computing, graphics, and gaming industry. But here, we will discuss key segments and products of the company.
AMD launched its first x86 processor named K5 in 1996. In the same year, the company acquired NexGen to secure the rights of x86-compatible chips. In 1997, the company rolled out K6 processor, which was faster than Intel’s Pentium II at that time. However, after transforming itself into one of the notable companies in the chip industry, AMD now offers high-quality PC computing experience. It develops high-performance desktop chips powered by advanced 7nm processor core technology.
Game console products
AMD claims to offers unmatched gaming experience to its users. For instance, its Radeon™ RX 5000 Series Graphics is developed to provide higher frame rates in multiple games, besides offering higher fidelity graphics and smooth HDR gameplay. Separately, its FreeSync technology helps to end choppy gameplay and fix broken frames. FreeSync monitors go through a careful certification process to ensure that users have a tear free experience.
The company builds graphic processors that are integrated in embedded systems deployed at a range of places such as casinos, healthcare facilities, industries etc. The products usually have a graphics processing device, with a RAM and GPU inside a multi-chip module. AMD regularly updates it embedded GPU products.
Investing in AMD
Investing in AMD stock is when you buy AMD shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy AMD stock in order to try and make a profit when the AMD stock price increases in value.
Trading AMD stock
Trading AMD stock is when a trader speculates on the movement in the AMD stock price without actually owning the shares in AMD. Traders tend to buy and sell AMD stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell AMD 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 AMD stock is via CFDs (contracts for differences). When trading AMD CFDs, you do not actually invest in AMD shares, meaning you are not tied to them. You are only speculating on the rise or fall of the AMD 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 AMD will rise or short (sell) positions if they thought that the AMD 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 AMD 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 AMD 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. AMD investors can use futures trading to speculate on the price movement of AMD 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.
AMD spread betting
Spread betting is a financial derivative that enables traders to speculate on AMD 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 AMD stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
AMD options are financial instruments that are derivatives based on the value of AMD’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 AMD 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.
AMD is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside AMD, may consider ETFs.
Where to buy AMD 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, 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, BaFin, CMA
Min $200 Deposit
ASIC, CySEC, IFSC, DFSA
Min $5 Deposit
Why trade AMD 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 AMD stock with relative ease. The costs involved to get started makes trading AMD 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 AMD stock to try and earn profit from the variation in AMD’s stock price. When trading AMD CFDs you can speculate long and short on prices rising or falling without actually needing to invest in AMD 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 AMD’s stock for a more long-term hold.
Buying AMD 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 AMD, it is important you understand the dynamics that affect the AMD stock price.
Factors affecting AMD stock price
Many factors contribute to the growth or decline of a stock. In case of AMD, we will discuss some of the key factors that control its share price.
AMD’s Ryzen chips and Radeon graphics cards have helped the company in the past to boost its market share. The growth has primarily been driven by its computing and graphics division, which is expected to keep boosting revenue in future.
The strong revenue growth helped the company to lift its share price in the recent years. AMD stock is expected to do well in future if its products keeps performing well.
Companies associated with the semiconductor industry are in a continuous race to launch smaller, faster, and more affordable chips. The semiconductor market has grown to $412 billion as of December 2019. AMD has been facing fierce competition in the industry from Intel Corp (INTC), International Business Machines Corporation (IBM), and NVIDIA Corporation (NVDA).
Intel is the largest and most popular chipmaker in the world, while IBM is a diversified technology company, and semiconductors manufacturing is one of the many divisions it holds. On the other hand, NVIDIA is focused on designing chips for graphics and gaming.
Every one of the aforesaid companies is competing in the market with each other in different segments. The growth of AMD stock in future depends on continuously launching the new products, while updating its existing portfolio, which can compete well in the market.
How to trade AMD stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade AMD stock online. Here is a summary of the key steps:
1. Decide if trading AMD stock is for you
Trading AMD 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 AMD stock online.
2. Educate yourself
Before trading AMD 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 AMD 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 AMD stock broker
In order to trade AMD 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 AMD
If you have made it this far then you may be ready to start trading AMD stock online! The next step is to research AMD 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 AMD 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 AMD stock
Once you feel ready to trade AMD stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on AMD, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of AMD trades for the long-term, whereas traders may buy and sell AMD stock on a daily basis.
Is trading AMD stock right for me?
Trading AMD 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 AMD 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 AMD 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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