How To Buy BP Stock
Welcome to Trading Brokers step by step guide to buying BP stock. Here you will find an easy to understand explanation of trading BP stock. This includes how to buy BP shares online, what you need to trade BP stock and how to open a trading account with a stock broker so that you can buy BP stock online today.
Maybe you have heard of buying BP 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 BP stock can help you along your journey.
The British multinational oil and gas company, BP, is involved in over 80 countries, employing thousands of people. Why should you buy its stock?
Overview of BP
BP Plc is a British multinational oil and gas conglomerate headquartered in Westminster, London. It is one of the oil and gas “supermajors,” one of the largest oil and gas companies by market capitalisation. The history of the company can be traced back to the founding of the Anglo-Persian Oil Company in 1908.
Today, BP is a comprehensive oil and gas company participating in all areas of the oil and gas value chain – exploration, production, refining, distribution, trading and petrochemical products. It is also involved in other areas of the energy business, including power generation and provision of renewable energy products and solutions such as biofuel, wind, solar and smart grid.
The oil giant does business in almost 80 countries, with over 70,000 people in its employ.
BP Business Overview
BP conducts business along 3 business lines; Upstream, Downstream, and Other Business and Renewables.
This part of the business deals with the exploration and production of crude oil and gas from deep wells and sea bottoms. The operations in this division are either conducted onshore (on dry land) or off-shore (from the seas). Via this, BP Plc produces over 3.5 million barrels per day of crude oil and equivalents. The core activities in this division include exploration, field development and production.
BP Plc possesses almost 20 billion barrels of oil and equivalents in its reserves. This division of the company is responsible for about 25% of revenue.
While the “Upstream” division deals with getting the product from the ground, the Downstream covers other segments of the oil and gas value chain. It consists of refining, manufacturing, marketing and storage, amongst others. BP Plc directly operates or owns a stake in 11 refineries where it refines crude into gasoline, diesel, jet fuels and other fuels.
Then there is the manufacturing business that produces petrochemicals and petrol-based products in 17 petrochemical plants globally. Finally, there is the trading and marketing segment which sells BP products to the final consumers. Through this segment, the company operates over 18,000 service stations as well as convenience stores which it operates with retailers such as Marks & Spencer and REWE.
Other Business and Renewables
Other BP’s business segments fall into this category. Here, BP engages in power generation as well as in generating renewable energy using solar, wind and hydrogen. Its biggest competitors include oil giants such as ExxonMobil, Chevron, Eni, Shell, Valero, and many others.
What Moves BP Plc Stock?
BP Plc trades under the ticker, BP, with primary listing on the London Stock Exchange (LSE). The company is an important component of the FTSE 100. BP also has secondary listing on the Frankfurt and New York stock exchanges. In the long term, the factors discussed below tend to affect BP stock’s trajectory.
The Future of the Oil and Gas Industry
The long-term projections for oil and gas are not the best. Carbon emissions are destroying the climate, and these emissions are generated from the fossils produced by BP and its competitors. BP particularly is said to have been responsible for over 1.5% of global industrial gas emissions from 1988 to 2015.
Petrochemicals and plastics are also damaging sea life. The oil majors also produce these. Governments, companies, and civil society groups are looking to change this. The activities undertaken in this line will include a clampdown on oil and gas and related activities.
Meanwhile, innovation is disrupting industries and bringing about cleaner products. Electric cars, trucks and scooters are getting massive adoption. This is still in light of projections that global oil demand is expected to peak by 2030, as admitted by BP itself. This underlines the need for the evolution of players in the oil and gas industry.
Emergencies and disasters are not rare in the oil and gas industry, and BP has experienced them in sufficient proportions. Between 2005 and 2010, BP was responsible for at least 3 major oil disasters, the worst being the devastating Deepwater Horizon blast and the ensuing oil spill. There have also been reports of near-disasters in recent years.
When these disasters occur, they cost the company a lot in fines, lawsuit, and claims, reputation damage and lots more, thereby massively eroding shareholder value. How well BP can manage past events and prevent future occurrences might go a long way in determining its stock price over time.
The future of the oil and gas industry lies in emerging markets. Thus, following in the right direction, BP is investing heavily in emerging energy markets; notable amongst them include investments in off-shore projects in Egypt, the United Arab Emirates, and Sub-Saharan Africa.
Pivot Towards Renewables
The energy of the future must be clean and renewable. Amongst the Big Oil firms, BP has particularly been noted for being bullish on renewable energy and has committed to becoming a net-zero emissions business by 2050.
More importantly, it has been making crucial investments in the clean energy sub-sector and is gradually cutting its focus on oil and gas. With these, BP is correctly positioning itself for the decline of fossils and the boom of renewables in the overall global energy mix.
Technology and Innovation
Over the years, BP has been noted for its innovation and culture of utilising technology to make processes better. Evidence of this is seen in its deployment of cutting-edge proprietary technology in its petrochemicals business.
It is one of the first firms to adopt data and artificial intelligence (AI) in the oil and gas industry.
Beyond oil and gas, BP is also making commitments towards innovations that will enable a cleaner future. For instance, it led equity investments in tech to charge electric cars faster than ever.
In recent years, BP has undergone some business restructuring geared towards making it an efficient company. In so doing, the company has sold assets worth more than $75 billion, including its petrochemicals business – and is gradually cutting down its investments in oil and gas while shifting focus to cleaner energy.
Before Investing in BP
BP Plc has good long-term prospects. The restructuring away from redundant assets and the shift of focus to newer energy has the tendencies to reward favorably in the far future. Meanwhile, in the meantime, it is still a stable business with good fundamentals, and it pays attractive dividends. Hence, if you are in search of a business with good long-term prospects and that always pays income in the shorter term, BP may be worth consideration.
Investing in BP
Investing in BP stock is when you buy BP shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy BP stock in order to try and make a profit when the BP stock price increases in value.
Trading BP stock
Trading BP stock is when a trader speculates on the movement in the BP stock price without actually owning the shares in BP. Traders tend to buy and sell BP stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell BP 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 BP stock is via CFDs (contracts for differences). When trading BP CFDs, you do not actually invest in BP shares, meaning you are not tied to them. You are only speculating on the rise or fall of the BP 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 BP will rise or short (sell) positions if they thought that the BP 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 BP 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 BP 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. BP investors can use futures trading to speculate on the price movement of BP 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.
BP spread betting
Spread betting is a financial derivative that enables traders to speculate on BP 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 BP stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
BP options are financial instruments that are derivatives based on the value of BP’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 BP 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.
BP is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside BP, may consider ETFs.
Where to buy BP 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 BP 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 BP stock with relative ease. The cost involved to get started makes trading BP 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 BP stock to try and earn profit from the variation in BP’s stock price. When trading BP CFDs you can speculate long and short on prices rising or falling without actually needing to invest in BP 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 BP’s stock for a more long-term hold.
Buying BP 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 BP, it is important you understand the dynamics that affect the BP stock price.
How to trade BP stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade BP stock online. Here is a summary of the key steps:
1. Decide if trading BP stock is for you
Trading BP 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 BP stock online.
2. Educate yourself
Before trading BP 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 BP 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 BP stock broker
In order to trade BP 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 BP
If you have made it this far then you may be ready to start trading BP stock online! The next step is to research BP 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 BP 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 BP stock
Once you feel ready to trade BP stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on BP, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of BP trades for the long-term, whereas traders may buy and sell BP stock on a daily basis.
Is trading BP stock right for me?
Trading BP 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 BP 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 BP 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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