How To Buy PepsiCo Stock
Welcome to Trading Brokers step by step guide to buying PepsiCo stock. Here you will find an easy to understand explanation of trading PepsiCo stock. This includes how to buy PepsiCo shares online, what you need to trade PepsiCo stock and how to open a trading account with a stock broker so that you can buy PepsiCo stock online today.
Maybe you have heard of buying PepsiCo 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 PepsiCo stock can help you along your journey.
Overview of PepsiCo
PepsiCo is an American multinational corporation that produces food and beverage products. The company is headquartered in Purchase, New York. In 1902, businessman and pharmacist Caleb Bradham founded the Pepsi-Cola Company after his soft drink got popular. In 1965, the Pepsi-Cola Company merged with Frito-Lay to form PepsiCo. The company later acquired Tropicana Products, a fruit-based beverage producer, and Quaker Oats Company, a food products manufacturing company, to expand its product range from its original drink Pepsi.
The company produces and markets many popular products including, Pepsi, Lay’s, Mountain Dew, 7 Up, Cheetos, Tropicana beverages, Mirinda, Gatorade, Diet Pepsi, Doritos Tortilla Chips, etc. The company’s main competitor in the beverage market is the Coca-Cola Company.
PepsiCo Inc. Stock
PepsiCo Inc. is listed on NASDAQ with the symbol of PEP. The stock of PepsiCo is a component of NASDAQ-100, S&P 100, and S&P 500.
What moves the stock price of PepsiCo Inc.?
The stock of PepsiCo Inc., like any other stock listed on the stock market, can move in response to different factors. However, based on the important areas where its stock can show the most movement, we can determine some factors which can have a significant impact on PepsiCo’s revenue and bottom line, leading to a rise or fall in the stock price.
PepsiCo’s competitors like Nestle, Unilever, and Coca-Cola are well-established and well-diversified brands and can give PepsiCo stiff competition. If PepsiCo’s competitors gain market share or develop a ground-breaking product, the stock price of PepsiCo will likely fall, whereas the stock price of the competitor will increase. Conversely, an increase in the market share in any segment of the market can result in a rise in the stock price of PepsiCo, provided all else remains constant.
Analysts’ Estimates & Earnings Reports
Analysts keep a close eye on the market statistics and continuously update their revenue and earnings-per-share (EPS) estimates. At the time when companies release their earnings report, the stock price increases if the report beats the analysts’ estimates and vice versa.
The SEC filings contain vital information about any significant development relating to the company. As an investor, you should thoroughly read SEC filings filed by PepsiCo and analyze its impact on the company’s market share, revenues, and profitability. If the development mentioned in the SEC filing forebears a positive impact on revenue and profitability, you should expect a rise in the stock price of PepsiCo. Conversely, negative news in the SEC filing can reduce the share price of PepsiCo.
New Acquisition or Product
PepsiCo holds many subsidiary companies, trademarks and has joint partnerships with various other brands. As an investor, you must keep yourself updated about any new acquisitions by PepsiCo and analyze the impact of the new acquisition on the market share and competitors’ operations. An acquisition that has industry-wide ramifications can move the share price of PepsiCo upwards.
PepsiCo Beverages North America segment contributes about 30% of total revenue to PepsiCo, the largest segment by revenue. Therefore, any change in the revenue percentage in this segment can have a significant impact on the company’s revenues and its stock price. Also, you should analyze the growth rate of each segment and determine the reasons for the increase or decrease in the growth rate to accurately predict the future movement and fair value of the stock price.
Other than doing fundamental analysis and following updates about the vital metrics about PepsiCo, you can do technical analysis to determine the stock’s future direction. To do this, determine the important support and resistance areas and include technical indicators to ascertain whether the stock is in an overbought or oversold area. If the stock is currently in an oversold area, expect the stock to climb from this point. Conversely, if the stock is in an overbought area, you can expect the stock price to fall from this point.
Technical analysis should not be done in isolation and must be supported by an underlying fundamental analysis of the stock. Technical analysis often works when there are no market triggers and no new information regarding market fundamentals is there for traders to trade.
Forecasting the future direction of a stock is a complex process. Often stocks experience big movements in prices when there is vital news regarding the company. Traders and speculators jump into the market and trade the stock, resulting in wild and irrational swings in the stock price. After some time, when sanity prevails, the stock reaches its true value after making corrections. Therefore, you must make an in-depth analysis of the stock before trading rather than trading it randomly in the direction of the trend.
Investing in PepsiCo
Investing in PepsiCo stock is when you buy PepsiCo shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy PepsiCo stock in order to try and make a profit when the PepsiCo stock price increases in value.
Trading PepsiCo stock
Trading PepsiCo stock is when a trader speculates on the movement in the PepsiCo stock price without actually owning the shares in PepsiCo. Traders tend to buy and sell PepsiCo stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell PepsiCo 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 PepsiCo stock is via CFDs (contracts for differences). When trading PepsiCo CFDs, you do not actually invest in PepsiCo shares, meaning you are not tied to them. You are only speculating on the rise or fall of the PepsiCo 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 PepsiCo will rise or short (sell) positions if they thought that the PepsiCo 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 PepsiCo 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 PepsiCo 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. PepsiCo investors can use futures trading to speculate on the price movement of PepsiCo 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.
PepsiCo spread betting
Spread betting is a financial derivative that enables traders to speculate on PepsiCo 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 PepsiCo stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
PepsiCo options are financial instruments that are derivatives based on the value of PepsiCo’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 PepsiCo 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.
PepsiCo is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside PepsiCo, may consider ETFs.
Where to buy PepsiCo 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 PepsiCo 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 PepsiCo stock with relative ease. The cost involved to get started makes trading PepsiCo 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 PepsiCo stock to try and earn profit from the variation in PepsiCo’s stock price. When trading PepsiCo CFDs you can speculate long and short on prices rising or falling without actually needing to invest in PepsiCo 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 PepsiCo’s stock for a more long-term hold.
Buying PepsiCo 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 PepsiCo, it is important you understand the dynamics that affect the PepsiCo stock price.
How to trade PepsiCo stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade PepsiCo stock online. Here is a summary of the key steps:
1. Decide if trading PepsiCo stock is for you
Trading PepsiCo 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 PepsiCo stock online.
2. Educate yourself
Before trading PepsiCo 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 PepsiCo 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 PepsiCo stock broker
In order to trade PepsiCo 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 PepsiCo
If you have made it this far then you may be ready to start trading PepsiCo stock online! The next step is to research PepsiCo 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 PepsiCo 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 PepsiCo stock
Once you feel ready to trade PepsiCo stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on PepsiCo, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of PepsiCo trades for the long-term, whereas traders may buy and sell PepsiCo stock on a daily basis.
Is trading PepsiCo stock right for me?
Trading PepsiCo 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 PepsiCo 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 PepsiCo 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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