How To Buy Cisco Systems Stock

How To Buy Cisco Systems Stock

Welcome to Trading Brokers step by step guide to buying Cisco Systems stock. Here you will find an easy to understand explanation of trading Cisco Systems stock. This includes how to buy Cisco Systems shares online, what you need to trade Cisco Systems stock and how to open a trading account with a stock broker so that you can buy Cisco Systems stock online today.

Maybe you have heard of buying Cisco Systems 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 Cisco Systems stock can help you along your journey.

Overview of Cisco Systems

Cisco Systems is a multinational company that develops and sells various telecommunication equipment and networking solutions, including hardware and software products. Cisco Systems provides VoIP services, network emergency response operations, cloud-based services, and certifications. The company’s services and products also include routers, switches, Wifi access points, network storage systems, data centers, cloud computing, telephony products, network operating systems, VPNs, etc.  The company is headquartered in San Jose, California, and has acquired numerous companies as its subsidiaries. The list of some notable subsidiary companies of Cisco Systems include:

 

  • Jabber & Jasper
  • OpenDNS
  • Webex
  • Scientific-Atlanta
  • Andiamo Systems

 

Sandy Lerner & Leonard Bosack, two computer scientists at Stanford University, founded the company in December 1984. The major competitors of Cisco Systems include Arista, Huawei, Riverbed, HP, Juniper, etc.

Cisco Systems stock

The company is listed on NASDAQ with the stock symbol of CSCO. The company’s stock is a component of NASDAQ-100, DJIA, S&P 100, & S&P 500. IPO of Cisco Systems was held on February 16, 1990, at a share price of less than a dollar.

What moves the stock price of Cisco Systems?

Trading stock of Cisco Systems can become easy if you determine the factors that drive the stock price of Cisco Systems. Cisco Systems is a big conglomerate with many subsidiaries. Therefore, to gauge the direction of the stock price of Cisco Systems, an investor must monitor most of the business segments and its subsidiaries to make an informed prediction of the stock.

We will enlist some important factors that can influence the stock price of Cisco Systems:

Business Segments

Cisco earns more than 50% of its revenue from infrastructure platforms, whereas it earns about 60% of its revenue from the Americas region. Therefore, the growth in the two segments is vital for Cisco Systems, and attrition in the market share or negative growth rate can dampen its revenues and profitability, turning the stock price of Cisco Systems downward. Therefore, to effectively predict the movement in the stock price of Cisco Systems, you should keep yourself updated about the latest numbers related to the vital segments of Cisco Systems.

Macroeconomic Conditions

Macroeconomic conditions can affect the revenue and profitability of Cisco Systems. In the scenario of an economic downturn, corporations look for reducing costs and do not make new investments in IT, networking, and communication infrastructures. Therefore, bad macroeconomic conditions can put pressure on the profitability and revenues of the company, resulting in the downward movement in its stock price. A booming economy with thriving businesses, on the other hand, can increase the demand for Cisco products, resulting in higher revenue and profitability for Cisco and a higher share price.

Acquisitions & Divestments

Over the years, Cisco Systems has acquired many companies that it deems necessary to boost its business integration. The share price of the company will increase in case of any major acquisition that can diversify its business, contribute significantly to its revenues and profitability, or increase its market share. A divestment, on the other hand, can be either positive or negative for its stock price, depending on the perception of the investors. For example, If Cisco Systems divests its investment from an ailing company that had been eating away the profitability of the other segments, the decision can be welcomed by the investors as divestment will stop the profitability leakage. While some investors might perceive the divestment negatively, thinking that the company’s decision to invest in the divested company was wrong.

Earnings Reports

The company’s earnings reports result in large movements in stock prices. Look for important metrics like revenue growth, earnings per share, profit margins, growth by segments, market share, financial ratios, etc to determine the financial health of the company. Strong financial results beating the analysts’ estimates and expectations result in a rise in stock price. On the contrary, poor financial results will drag the stock price down.

Future Sales Guidance

The company’s CEO usually gives sales guidance for the future. The sales guidance can be important to estimate the direction of the stock price of Cisco Systems. Before investing in Cisco Systems or any stock, you should carefully read the business guidance report and its financial reports to make an informed prediction about the movement of the stock price.

Conclusion

The more informed an investor about a specific stock is, the better they will be able to understand the price movement and fair value of the stock. The above-mentioned factors if properly analyzed can give you enough information about the movement in the price of Cisco Systems’ stock.

Investing in Cisco Systems

Investing in Cisco Systems stock is when you buy Cisco Systems shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Cisco Systems stock in order to try and make a profit when the Cisco Systems stock price increases in value.

Trading Cisco Systems stock

Trading Cisco Systems stock is when a trader speculates on the movement in the Cisco Systems stock price without actually owning the shares in Cisco Systems. Traders tend to buy and sell Cisco Systems stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.

You can buy and sell Cisco Systems stock online through various methods including spot markets, futures contracts, options contracts, spread bets, CFDs (contracts for differences) and ETFs (exchange-traded funds).

Cisco Systems CFDs

One of the most popular ways to trade Cisco Systems stock is via CFDs (contracts for differences). When trading Cisco Systems CFDs, you do not actually invest in Cisco Systems shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Cisco Systems 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 Cisco Systems will rise or short (sell) positions if they thought that the Cisco Systems 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 Cisco Systems 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 Cisco Systems 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.

Cisco Systems futures

Futures contracts are an agreement to buy or sell a specified asset at a certain date and price. Cisco Systems investors can use futures trading to speculate on the price movement of Cisco Systems 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.

Cisco Systems spread betting

Spread betting is a financial derivative that enables traders to speculate on Cisco Systems 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 Cisco Systems stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.

Cisco Systems options

Cisco Systems options are financial instruments that are derivatives based on the value of Cisco Systems’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 Cisco Systems market price.

Cisco Systems ETFs

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.

Cisco Systems is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Cisco Systems, may consider ETFs.

Where to buy Cisco Systems 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.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.

ASIC, BVI, CBI, FFAJ, JFSA, FSCA, IIROC, ADGM FRSA

Min $100 Deposit

2006

1:400

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2.

FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF

Min $250 Deposit

1974

1:200

Review Trade! Trade!
Terms & conditions apply
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3.

ASIC, CySEC, IFSC, DFSA

Min $5 Deposit

2009

1:888

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.28% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
4.

ASIC, CySEC, FSA, SCB

Min $200 Deposit

2007

1:500

Review Trade! Trade!
Terms & conditions apply
Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
5.

ASIC, FCA, DFSA, SCB, CySEC, BaFin, CMA

Min $200 Deposit

2010

1:30

Review Trade! Trade!
Terms & conditions apply
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Why trade Cisco Systems 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 Cisco Systems stock with relative ease. The cost involved to get started makes trading Cisco Systems 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 Cisco Systems stock to try and earn profit from the variation in Cisco Systems’s stock price. When trading Cisco Systems CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Cisco Systems 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 Cisco Systems’s stock for a more long-term hold.

Buying Cisco Systems 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 Cisco Systems, it is important you understand the dynamics that affect the Cisco Systems stock price.

How to trade Cisco Systems stock online?

If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Cisco Systems stock online. Here is a summary of the key steps:

1.     Decide if trading Cisco Systems stock is for you

Trading Cisco Systems 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 Cisco Systems stock online.

2.     Educate yourself

Before trading Cisco Systems 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 Cisco Systems 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 Cisco Systems stock broker

In order to trade Cisco Systems 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 Cisco Systems

If you have made it this far then you may be ready to start trading Cisco Systems stock online! The next step is to research Cisco Systems 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 Cisco Systems 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 Cisco Systems stock

Once you feel ready to trade Cisco Systems stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Cisco Systems, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Cisco Systems trades for the long-term, whereas traders may buy and sell Cisco Systems stock on a daily basis.

Is trading Cisco Systems stock right for me?

Trading Cisco Systems 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 Cisco Systems 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 Cisco Systems 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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