How To Buy Costco Stock

How To Buy Costco Stock

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

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

Overview of Costco

Costco Wholesale Corporation (COST) operates a chain of warehouses that sell a wide range of branded products to its members on discounted prices. The company also offers a wide variety of its own Kirkland Signature products.

The Issaquah, Washington-based multi-billion retailer is dedicated to offer the best possible prices on quality brands to its members, along with exclusive member services. It has warehouse club operations in 8 countries including the U.S., U.K., Canada, Mexico, Spain, Puerto Rico, Australia, and Japan. It also runs warehouses with the help of its subsidiaries in Korea and Taiwan. Costco operates on a model of keeping the costs down and let savings pass on to the members.

Product portfolio

Costco sells merchandise ranging from dry foods and snacks to electronics and pharmacy. The company gradually increased its products and services over the years. It has a habit of regularly changing its inventory. The company sells books, clothing, computer software, wine, furniture, electronics, jewelry, dairy, baked goods, meat, solar panels, and tires among many others. Many warehouses even have gas stations, tire garages and pharmacies, while some locations have liquor stores.

Kirkland Signature

Kirkland Signature is a private label of Costco that was introduced by the company in 1992. It represents almost a third of its overall sales. The idea to launch the company’s trademark products was to offer high quality at affordable prices to its members, so that they keep coming back after trying new Kirkland products.

Costco travel

Costco Travel offers leisure travel services to Costco members living in the U.S. and Canada. The service, launched in 2000, offer vacation packages to a number of tourist attractions around the world. It also offers rental cars, cruises, and theme park packages.

Investing in Costco

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

Trading Costco stock

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

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

Costco CFDs

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

Costco futures

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

Costco spread betting

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

Costco options

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

Costco 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.

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

Where to buy Costco 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, FSA, FSCA

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

Min $200 Deposit

2010

1:500

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.
4.

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.
5.

ASIC, CySEC, FSA

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.

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

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

Factors affecting Costco stock price

Here are some of the key factors that have contributed to the growth of Costco stock.

Membership fees

The company has been following a subscription business model, which means, to be able to shop at Costco stores, one must have a membership, which anyone can sign up for around $60 per year. By becoming a Costco member, people can buy goods at affordable wholesale prices.

Costco buy large quantities of products at lower prices and subsequently sell them to its shoppers at low margins. The company has a very loyal customer base. More than 90 percent of its customers renew their membership in the U.S. and Canada, while it has about 88 percent renewal rate in the remaining regions around the world.

The higher renewal rates show its customer consider the service worth the membership fee. This is one of the reasons behind Costco’s growth over the recent years. If the company continued to offer quality services to its members, it will help it in further boosting its sales and ultimately its share price will move higher.

Lower prices

Costco member can consistently buy products on lower prices, as compared to rival stores such as Walmart, which occasionally offer products on discounted prices.

On the other hand, Costco operates at a very low margin, around 11 percent, to ensure the satisfaction of its members by offering them discounted prices during the whole year. The affordability factor gives the company an edge to better compete with rivals and boost its market share, ultimately driving its stock growth.

How to trade Costco stock online?

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

1.     Decide if trading Costco stock is for you

Trading Costco 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 Costco stock online.

2.     Educate yourself

Before trading Costco 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 Costco 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 Costco stock broker

In order to trade Costco 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 Costco

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

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

Is trading Costco stock right for me?

Trading Costco 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 Costco 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 Costco 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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