How To Buy Ferrari Stock
Welcome to Trading Brokers step by step guide to buying Ferrari stock. Here you will find an easy to understand explanation of trading Ferrari stock. This includes how to buy Ferrari shares online, what you need to trade Ferrari stock and how to open a trading account with a stock broker so that you can buy Ferrari stock online today.
Maybe you have heard of buying Ferrari 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 Ferrari stock can help you along your journey.
Overview of Ferrari
Ferrari N.V. (RACE) is a luxury sports car maker based in Italy. The company was founded in 1939 by Enzo Ferrari. However, its inception as an automaker was recognized in 1947, when its first Ferrari-badged vehicle was launched.
The company also manufactures limited series cars and one-off vehicles. Moreover, it also provides financing services to customer via Ferrari Financial Services. Overall, it operates in more than 60 markets globally through a chain of authorized dealers.
Ferrari has rolled out several luxury sports cars over the years. Some of its famous models include Ferrari 812 GTS, Ferrari F8 Spider, Ferrari Portofino M, Ferrari Roma, Ferrari F8 Tributo, Ferrari SF90 Stradale, Ferrari 488 Pista and 488 Pista Spider among many others.
Growth prospects and risks
One thing that makes Ferrari stand out from the rest of the automakers is its immense brand power, which enables it to operate on high profit margins than rivals. Its pricing power makes it more of a luxury goods company than a usual automaker.
However, its pricing powers come at a cost. Ferrari has been maintaining its exclusivity and brand name by producing limited number of cars on annual basis. Even then, it managed to gradually increase its stock value over time using different means. One good thing that happed to the company in the recent years is that it successfully managed to increase prices of regular models without losing sales, which is again attributed to its brand power.
Moreover, the company occasionally enjoys huge profit margins by producing limited-edition luxury models for selected customers. The company is also growing in new markets, especially China.
The big difference
As we discussed before, Ferrari, unlike its peers, does not really play by the same rules of the auto industry such as producing bulk cars to boost profits. The demand for its cars always seems to be higher than supply due to its limited production practices. Rival companies such as Ford, Toyota and GM can never simply reach the brand image or pricing capabilities of Ferrari, which makes it a lucrative option for investors.
Even in the worst economic conditions and recession times, the demand for Ferrari cars does not go down, mainly due to its rich customer base who usually do not care about economy or affordability. On the hand, sales of other automakers greatly depend on economic conditions and buying power of customer.
The company’s profit-making capability greatly depends on the recognition of Ferrari brand. There are several factors that have been contributing to the success of its brand such as quality, design, and performance among many other.
However, if the company failed to keep up the image and value of its brand, its ability to operate on high margins is expected to get affected. So, the company needs to maintain the quality and performance of its products to keep growing in the coming years. Moreover, it must address the changing preferences of customers over time and roll out the newer models according to their taste, to ensure its long-term success.
Investing in Ferrari
Investing in Ferrari stock is when you buy Ferrari shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Ferrari stock in order to try and make a profit when the Ferrari stock price increases in value.
Trading Ferrari stock
Trading Ferrari stock is when a trader speculates on the movement in the Ferrari stock price without actually owning the shares in Ferrari. Traders tend to buy and sell Ferrari stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell Ferrari 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 Ferrari stock is via CFDs (contracts for differences). When trading Ferrari CFDs, you do not actually invest in Ferrari shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Ferrari 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 Ferrari will rise or short (sell) positions if they thought that the Ferrari 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 Ferrari 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 Ferrari 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. Ferrari investors can use futures trading to speculate on the price movement of Ferrari 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.
Ferrari spread betting
Spread betting is a financial derivative that enables traders to speculate on Ferrari 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 Ferrari stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
Ferrari options are financial instruments that are derivatives based on the value of Ferrari’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 Ferrari 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.
Ferrari is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Ferrari, may consider ETFs.
Where to buy Ferrari 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 Ferrari 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 Ferrari stock with relative ease. The cost involved to get started makes trading Ferrari 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 Ferrari stock to try and earn profit from the variation in Ferrari’s stock price. When trading Ferrari CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Ferrari 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 Ferrari’s stock for a more long-term hold.
Buying Ferrari 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 Ferrari, it is important you understand the dynamics that affect the Ferrari stock price.
How to trade Ferrari stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Ferrari stock online. Here is a summary of the key steps:
1. Decide if trading Ferrari stock is for you
Trading Ferrari 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 Ferrari stock online.
2. Educate yourself
Before trading Ferrari 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 Ferrari 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 Ferrari stock broker
In order to trade Ferrari 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 Ferrari
If you have made it this far then you may be ready to start trading Ferrari stock online! The next step is to research Ferrari 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 Ferrari 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 Ferrari stock
Once you feel ready to trade Ferrari stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Ferrari, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Ferrari trades for the long-term, whereas traders may buy and sell Ferrari stock on a daily basis.
Is trading Ferrari stock right for me?
Trading Ferrari 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 Ferrari 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 Ferrari 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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