How To Buy Lyft Stock 2020
Welcome to Trading Brokers step by step guide to buying Lyft stock in 2020. Here you will find an easy to understand explanation of trading Lyft stock. This includes how to buy Lyft shares online, what you need to trade Lyft stock and how to open a trading account with a stock broker so that you can buy Lyft stock online today.
Maybe you have heard of buying Lyft 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 Lyft stock can help you along your journey.
Overview of Lyft
Lyft Inc. (LYFT), founded in 2012, is engaged in operating a mobile app that offers vehicles for hire, e-scooters, and bicycle-sharing system, as well as food delivery services. The San Francisco, California-based currently operates in the U.S. and Canada.
The on-demand transportation service provider connects drivers with users who request a ride using Lyft app. Passengers can make payment through the app after reaching their destination. The company also operates a network of shared scooters and bikes in certain cities to meet the needs of users seeking short trips.
Lyft is one of the fastest growing multimodal transportation service providers in the U.S. and Canada, facilitating thousands of rides on daily basis. The company generates revenues every time a passenger completes a ride using its app. It takes 20 to 30 percent of revenue generated by each ride, while the rest of the revenue goes to the driver. The company can substantially grow in the coming years if it starts expanding its services in the global markets.
Another potential growth prospect for ride-sharing services like Lyft is that due to heavy traffic in most of the developed cities, it is becoming increasingly difficult for people to move around in their own vehicles, due to limited parking space and many other factors.
People are looking for simpler and easy ways to travel around, thus creating tremendous growth opportunities for on-demand transportation service providers like Lyft. Moreover, the average cost of a new car in the U.S. has increased significantly over the years, creating affordability issues, which is another opportunity Lyft can capitalize on. Besides, transportation is a huge market. According to an estimate, transportation was the second biggest household expenditure in the U.S., after housing.
The company’s long-term success mainly depends on the growth of its rider base. The company has been trying to boost its reach by spending on consumer awareness campaigns regarding its services. It also provides discounts for passengers using Lyft service for the first time. Moreover, it offers rewards to drivers and existing users for referring a new rider. If the company continue to bring more users and riders on its platform, it is expected to do well in future.
Lyft is already offering multiple modes of ride-sharing services, though there is still room for more offerings to address the growing and changing consumer preferences. More options for customers mean more revenue generating opportunities and more growth.
Lyft is making investments to improve mapping, routing, and payment features, to make its platform more reliable and safer. It is also spending on autonomous technology in an effort to introduce autonomous cars on roads. The company’s investments are expected to pay off in the coming years and will offer it a competitive edge over the rivals if it succeeds in its autonomous ventures.
Lyft is currently competing with Uber in the two countries it operates in. However, Uber is an established service not just in the U.S. and Canada, but several countries around the world. Lyft is expected to face intense competition from Uber if it decides to expand in the international markets.
Investing in Lyft
Investing in Lyft stock is when you buy Lyft shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Lyft stock in order to try and make a profit when the Lyft stock price increases in value.
Trading Lyft stock
Trading Lyft stock is when a trader speculates on the movement in the Lyft stock price without actually owning the shares in Lyft. Traders tend to buy and sell Lyft stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell Lyft 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 Lyft stock is via CFDs (contracts for differences). When trading Lyft CFDs, you do not actually invest in Lyft shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Lyft 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 Lyft will rise or short (sell) positions if they thought that the Lyft 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 Lyft 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 Lyft 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. Lyft investors can use futures trading to speculate on the price movement of Lyft 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.
Lyft spread betting
Spread betting is a financial derivative that enables traders to speculate on Lyft 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 Lyft stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
Lyft options are financial instruments that are derivatives based on the value of Lyft’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 Lyft 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.
Lyft is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Lyft, may consider ETFs.
Where to buy Lyft 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 a trading 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
Min $200 Deposit
ASIC, CySEC, IFSC
Min $5 Deposit
Why trade Lyft 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 Lyft stock with relative ease. The cost involved to get started makes trading Lyft 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 Lyft stock to try and earn profit from the variation in Lyft’s stock price. When trading Lyft CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Lyft 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 Lyft’s stock for a more long-term hold.
Buying Lyft 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 Lyft, it is important you understand the dynamics that affect the Lyft stock price.
How to trade Lyft stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Lyft stock online. Here is a summary of the key steps:
1. Decide if trading Lyft stock is for you
Trading Lyft 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 Lyft stock online.
2. Educate yourself
Before trading Lyft 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 Lyft 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 Lyft stock broker
In order to trade Lyft 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 Lyft
If you have made it this far then you may be ready to start trading Lyft stock online! The next step is to research Lyft 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 Lyft 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 Lyft stock
Once you feel ready to trade Lyft stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Lyft, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Lyft trades for the long-term, whereas traders may buy and sell Lyft stock on a daily basis.
Is trading Lyft stock right for me?
Trading Lyft 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 Lyft 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 Lyft 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.
Not sure which Lyft broker to trade online with?
If you are still unsure which Lyft stock broker is the best for you to trade online with then you can use our free online broker comparison tool to quickly compare brokers based on regulations, minimum deposit, leverage, spreads, commissions, funding options and more. You can also read our broker reviews and choose from our best brokers, best trading platforms, best social trading platforms and best trading apps. If you would like to look for the best trading brokers in a particular country, we have pages dedicated to our best brokers USA, best brokers UK, best brokers Australia, best brokers South Africa and best brokers Canada.
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