How To Buy Uber Stock
Welcome to Trading Brokers step by step guide to buying Uber stock. Here you will find an easy to understand explanation of trading Uber stock. This includes how to buy Uber shares online, what you need to trade Uber stock and how to open a trading account with a stock broker so that you can buy Uber stock online today.
Maybe you have heard of buying Uber 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 Uber stock can help you along your journey.
Uber offers ride-hailing services to people and serves as a source of extra income for drivers. Why should you buy its stock?
Overview of Uber
Uber Technologies Inc. was founded in 2009 to connect people who needed rides to car owners who wanted to make extra money. Launched as UberCab in San Francisco, California, Uber has now expanded to over 400 cities in at least 70 countries.
With over 26,000 people in its employ, Uber has facilitated the gig economy’s acceleration, now popularly referred to as the “Uber economy.” The company has at least 50 million users, with over 5 million drivers doing more than 6 billion “trips” per annum.
Uber Business Lines
Uber does business through 4 significant segments: Delivery, Mobility, Freight, and ATG and Other Technology Programs. The Mobility segment consists of Uber’s core ride-sharing business, which connects commuters to drivers who ride cars, motorcycles, taxes, etc. Delivery mainly consists of Uber Eats, which helps people find restaurants and order food only.
Then there is Uber Freight that connects shippers and carriers. The Advanced Technologies Group (ATG) houses Uber’s futuristic projects like its self-driving cars project. Then there is also the Uber Copter, which allows users to book helicopter rides. Notable amongst Uber’s subsidiaries are Postmates, Careem, and Otto.
What Moves Uber Stock?
Uber Technologies Inc. was listed for trading on the NYSE in May 2019 in what was described as a rather disappointing IPO. It trades under the eponymous ticker, UBER. Some of the issues raised below will influence its price over the midterm.
At least in the United States, the ride-hailing business is dominated by two companies, Uber and Lyft. However, the rivalry between both companies is deep. In many cases, the good news about one company is seen as bad news for the other.
In other markets also, Uber has got to deal with tons of other competitors. In Africa, Bolt (formerly Taxify) has extensive market reach. While the acquisition is a strategy to deal with local rivals – as Uber did by acquiring Careem – it is not always an effective one.
The company is also neck-deep in competition in its other businesses. In food delivery, it has a myriad of vibrant startups like GrubHub, DoorDash, Deliveroo, and the giant, Amazon. There are industry heavyweights to deal with in freight, including DHL, NEXT Trucking, Coyote, and many more.
Finally, the self-driving business has giants like Alphabet Inc (via Waymo), GM, Apple, and Tesla alongside a handful of other startups to contend with. Hence, gaining a significant market share will be a difficult task.
Regulation and Government Oversight
Uber and its competitors have been on the radar of regulators for various reasons. By far, the most profound case is that of the Californian Senate Law Assembly Bill 5, which amongst other things, recognises and categorises gig workers as employees of the companies under which they are registered. The bill entitles them to certain benefits such as minimum wage, paid sick time, and health insurance, amongst others.
Following California’s decision, other state legislatures – especially New York and New Jersey – may also introduce such in the future. If it goes through, the law can severely affect the gig economy or effectively destroy it. As gig workers get converted to employees, the lifestyle’s flexibility gets eroded.
It will also hurt companies based around the gig economy like GrubHub, DoorDash, Uber, and Lyft, as it will eat deep into their bottom-line. While the issue is still subject to judicial decision, it will go a long way to define Uber’s future. Beyond California, Uber has also regularly got into trouble with regulators.
At some point, London failed to renew its license to operate over passenger safety concerns. It has also had several other skirmishes with authorities in various countries such as France, Italy, and Germany.
Health and Pandemic
The 2020 pandemic has shown that the future will be a lot remote than ever before. The number of people who commute, especially to their places of work, will be affected for time to come. This will also affect firms’ business in the general transportation industry in the mid-term, if not longer. Uber is already feeling its pangs.
However, it also presents opportunities for expansion into other areas. For instance, the pandemic has accelerated the growth of Uber Eats as people order food online like never before. There are also some good opportunities for its freight business. The ride-hailing business is still Uber’s most profitable. Notably, the delivery business segment comes with a lot of logistical bottlenecks.
After several years of existence, Uber has failed to crack the code to profitability, despite having burned billions of dollars in funding. How quickly it becomes profitable will go a long way in determining its future stock price movements, especially as Wall Street and the entire investing community is getting increasingly impatient with so-called high-growth but loss-making companies.
Before Investing in Uber
Uber is a growth-stock with a significant upside. However, that potential partially hinges on its profitability. Also, its budding self-driving technology might eventually deliver massive gains for investors.
Investing in Uber
Investing in Uber stock is when you buy Uber shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Uber stock in order to try and make a profit when the Uber stock price increases in value.
Trading Uber stock
Trading Uber stock is when a trader speculates on the movement in the Uber stock price without actually owning the shares in Uber. Traders tend to buy and sell Uber stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.
You can buy and sell Uber 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 Uber stock is via CFDs (contracts for differences). When trading Uber CFDs, you do not actually invest in Uber shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Uber 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 Uber will rise or short (sell) positions if they thought that the Uber 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 Uber 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 Uber 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. Uber investors can use futures trading to speculate on the price movement of Uber 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.
Uber spread betting
Spread betting is a financial derivative that enables traders to speculate on Uber 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 Uber stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.
Uber options are financial instruments that are derivatives based on the value of Uber’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 Uber 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.
Uber is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Uber, may consider ETFs.
Where to buy Uber 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 Uber 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 Uber stock with relative ease. The cost involved to get started makes trading Uber 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 Uber stock to try and earn profit from the variation in Uber’s stock price. When trading Uber CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Uber 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 Uber’s stock for a more long-term hold.
Buying Uber 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 Uber, it is important you understand the dynamics that affect the Uber stock price.
How to trade Uber stock online?
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Uber stock online. Here is a summary of the key steps:
1. Decide if trading Uber stock is for you
Trading Uber 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 Uber stock online.
2. Educate yourself
Before trading Uber 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 Uber 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 Uber stock broker
In order to trade Uber 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 Uber
If you have made it this far then you may be ready to start trading Uber stock online! The next step is to research Uber 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 Uber 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 Uber stock
Once you feel ready to trade Uber stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Uber, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Uber trades for the long-term, whereas traders may buy and sell Uber stock on a daily basis.
Is trading Uber stock right for me?
Trading Uber 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 Uber 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 Uber 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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