How To Buy Snowflake Stock
Welcome to Trading Brokers step by step guide to buying Snowflake stock. Here you will find an easy to understand explanation of trading Snowflake stock. This includes how to buy Snowflake shares online, what you need to trade Snowflake stock and how to open a trading account with a stock broker so that you can buy Snowflake stock online today.
Maybe you have heard of buying Snowflake 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 Snowflake shares can help you along your journey.
Overview of Snowflake
After years of rumors Snowflake Inc. (NYSE:SNOW) debuted on Wall Street as one of the most anticipated IPOs in recent memory. But to the everyday investor, simply hearing the name of the company may not illustrate exactly what all of the fuss was about when Snowflake went public. After all, with a name like Snowflake, it could be a part of any number of industries, so let’s dive a little deeper into why Wall Street is so excited about this firm.
Snowflake is at its core a tech company. As investors know, tech stocks provide the single fastest vehicle of growth for investments in the history of industry. But it is not just any sort of tech company, it is a cloud-based data storage and analytics service that operates on three of the biggest cloud servers available Azure by Microsoft (NASDAQ:MSFT), Amazon Web Services from Amazon (NASDAQ:AMZN), and the Google Cloud Platform from Alphabet (NASDAQ:GOOGL). Snowflake actually advertises itself as a cloud-based data-warehouse company above anything which of course, begs the question: What is a data-warehouse?
Big data & the future of data management
The bottom line is, as companies continue to grow the world relies more on the internet and cloud-based solutions, we are creating infinite amounts of data. This data needs to be stored somewhere, organized, and made easily accessible at the click of a button. Data warehouses are just centralized repositories of data, and it is the cloud-based software that accesses and analyzes that data which makes Snowflake so enticing. Snowflake is agile and provides on the fly scalable computing that can take massive amounts of data and integrates it seamlessly.
So, Wall Street analysts and investors alike are gushing over Snowflake’s stock and for good reason. Founded in 2012, Snowflake has some heavy duty Silicon Valley bloodlines behind its origins, as two of the three co-founders were data architects at Oracle (NYSE:ORCL). Just eight years later and Snowflake has well over 3000 businesses that use its cloud-based solutions to bring more satisfying experiences to their customers. Some of the names that Snowflake serves are Adobe, DocuSign, Instacart, Capital One, DoorDash, and Electronic Arts.
Does Snowflake have any competition? The answer is a resounding yes, of course and not really. The unique situation that Snowflake finds itself in it both competes with and relies on Amazon Web Services, Google Cloud, and Microsoft Azure. Is that bad? It’s more complicated than bad, but it does represent an awkward long-term outlook. Any of these companies have the capacity to develop something similar to Snowflake, and in fact, Amazon already has with its project Redshift. Amazon also realizes that Snowflake does bring more customers to AWS, but in the end, one day this may not be enough to stop Amazon from competing in the space. For now, Snowflake does have the premier software and is building itself quite the moat with all of its big-name clients.
Snowflake for the future
For now, Snowflake offers a unique service with an incredibly enticing pay per storage and a per-second basis, making this setup a high potential revenue grower over time. Wall Street certainly appreciates this as some of the heavy-weights in the venture capital industry are backing Snowflake including Sequoia Capital, Redpoint Ventures, and even Warren Buffet himself who made Snowflake the first IPO he has purchased since Ford, way back in 1956. As the world relies more and more on big data, Snowflake should continue to thrive in an industry where it has established itself as the go to brand, for storage and security.
Investing in Snowflake
Investing in Snowflake stock is when you buy Snowflake shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Snowflake stock in order to try and make a profit when the Snowflake stock price increases in value.
Trading Snowflake stock
Trading Snowflake stock is when a trader speculates on the movement in the Snowflake stock price without actually owning the shares in Snowflake. Traders tend to buy and sell Snowflake stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell Snowflake 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 Snowflake stock is via CFDs (contracts for differences). When trading Snowflake CFDs, you do not actually invest in Snowflake shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Snowflake 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 Snowflake will rise or short (sell) positions if they thought that the Snowflake 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 Snowflake 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 Snowflake 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. Snowflake investors can use futures trading to speculate on the price movement of Snowflake 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.
Snowflake spread betting
Spread betting is a financial derivative that enables traders to speculate on Snowflake 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 Snowflake stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
Snowflake options are financial instruments that are derivatives based on the value of Snowflake’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 Snowflake 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.
Snowflake is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Snowflake, may consider ETFs.
Where to buy Snowflake 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 Snowflake 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 Snowflake stock with relative ease. The cost involved to get started makes trading Snowflake 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 Snowflake stock to try and earn profit from the variation in Snowflake’s stock price. When trading Snowflake CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Snowflake 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 Snowflake’s stock for a more long-term hold.
Buying Snowflake 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 Snowflake, it is important you understand the dynamics that affect the Snowflake stock price.
How to trade Snowflake stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Snowflake stock online. Here is a summary of the key steps:
1. Decide if trading Snowflake stock is for you
Trading Snowflake 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 Snowflake stock online.
2. Educate yourself
Before trading Snowflake 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 Snowflake 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 Snowflake stock broker
In order to trade Snowflake 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 Snowflake
If you have made it this far then you may be ready to start trading Snowflake stock online! The next step is to research Snowflake 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 Snowflake 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 Snowflake stock
Once you feel ready to trade Snowflake stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Snowflake, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Snowflake trades for the long-term, whereas traders may buy and sell Snowflake stock on a daily basis.
Is trading Snowflake stock right for me?
Trading Snowflake 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 Snowflake 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 Snowflake 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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