Why is Amazon important to traders?
Amazon is the world's largest online retailer that also specialises in consumer electronics – like the Amazon Kindle – and cloud computing services. It should come as no surprise that many investors around the world are drawn to trade Amazon. The internet titan has cemented its position as a leader in online retail - it became the second company ever to be valued at a trillion dollars after Apple.
Even with leading tech shares like Amazon, Netflix, and Nvidia, volatility is still a constant part of day-to-day trading. There is always plenty of information and Amazon share price news available, meaning that AMZN shares usually experience a high degree of short-term price movement.
A popular way of trying to take advantage of these shorter-term price movements is to trade CFDs on stocks.
The reasons why people choose to invest in Amazon stock can be varied – although the main reason is, of course, looking for the price to rise and increase the value of their investment.
Amazon trading hours
With Capital.com, you can trade AMZN shares between the normal US trading hours, typically between 14:30 and 21:00, Monday to Friday (GMT). This gives you plenty of time to monitor the company’s activity and keep an eye out for any events that may affect short-term movements in the share price.
How is the Amazon share price calculated?
There is a multitude of factors that contribute to how Amazon share prices are calculated. One of those factors is best described as 'supply and demand.' If a company like Amazon demonstrates a huge potential in long-term earnings, then more buyers will be driven to purchase shares – therefore increasing the price.
Whether the market is bullish or bearish, there are always other external factors than just buyers and sellers that can affect the AMZN share price. For example, earning reports, political or economic news, and other factors affect the share price in the short-term. These rises and falls are usually temporary but make for good volatility for traders to capitalise on.
How to trade Amazon CFDs
As with all online trading and investing, the actual process is often much simpler than it sounds. So, are you wondering how to trade? Here’s a brief five-step guide showing you the simplest way to execute a trade in Amazon below:
1. Choose a broker, like Capital.com.
2. Deposit an initial amount.
3. Select the stock (in this case, AMZN).
4. Choose the amount you'd like to invest.
5. Execute the deal.
Of course, the one essential part of the process that can be fairly complex is the actual Amazon stock analysis, and the crunching of numbers to come up with the correct strategy. This is something which deserves an in-depth guide of its own and should be undertaken at your own pace, to ensure you're fully educated on the steps to take. Capital.com provides a wide variety of guides, data and insights to help you with your research.
Trade Amazon.com Inc - AMZN CFD
Trade Amazon CFDs with Capital.com. Sign up at Capital.com to use our desktop platform, or download our mobile app to start trading on the most popular global markets anywhere, anytime.
Another reason this company is attractive to investors and traders is the Amazon market capitalization. As much as this may just sound like industry jargon, it's actually a very straightforward concept within financial markets. Market capitalization (or market cap) simply refers to the total value of a company. This figure is calculated by taking the share price and multiplying it by the total number of shares currently outstanding.
Why trade Amazon CFDs with Capital.com
Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative News Feed offers a range of materials to put him back on the right track. The neural network analyses in-app behaviour and recommends videos, articles, news to polish your investment strategy.
Trading on margin: Providing trading on margin (5:1 for individual equities), Capital.com gives you access to AMZN with the help of CFDs.
Trading the difference: By trading CFDs on AMZN, you speculate on the rise or fall of its price. CFDs trading is no different from traditional trading in terms of its associated strategies. A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives.
All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. For instance, a trader could choose to have AMZN analysis and forecasts as a big part of their feed. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.
Focus on safety: Capital.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.
History of Amazon
Amazon (AMZN) was founded by Jeff Bezos in 1994 as an online bookstore. Growing in leaps and bounds since its inception, the company expanded rapidly in other areas of expertise.
The business soon began selling more than just books. In 1998, video and music sales started. During the same year, Amazon began international operations with the acquisition of online booksellers in the United Kingdom and Germany. By 1999, the company was already selling consumer electronics, software, video games, toys and games, home-improvement items and much more.
In May 1997, less than two years after opening its doors for online consumers and without making any profits, Amazon became a public company, raising $54 million on the NASDAQ exchange. Going public at $18 per share, with a valuation of $300 million, the company was able to use its high-flying stock to finance its aggressive growth and acquisition strategy.
In 2002 it launched Amazon Web Services (AWS). It is now the world’s largest provider of cloud computing services with revenues in excess $46bn.
In 2005 it introduced Amazon Prime, a paid subscription service that offered fast delivery of purchases and a streaming service. It now has more than 200 million subscribers worldwide and revenues in excess of $20bn.
Today, with its head office in Seattle, Washington and offices in over 30 countries around the world, Amazon has become a powerhouse, being ahead of the game for a long time in its market. Its continual evolution in an ever-shifting marketplace has proven how concrete its position is as the world's largest internet retailer. Over the years, many people have profited from investing in the rising share price and continued growth of Amazon.
With industry’s titans as the share price continues to rise, the 'fear of missing out' (FOMO) is strong. Amazon stock history is full of tales of investors who sold too soon. Its continued growth is also one of the many reasons why people still actively look to trade Amazon shares.
On September 4, 2018, Amazon became the second company to hit $1 trillion in market capitalisation, close on the heels of Apple Inc, which achieved this milestone only a month earlier.
On July 5, 2019, Amazon celebrated a quarter-century mark of its existence. At that time, it had over 647,500 employees, occupied 288.4 million square feet of real estate and accounted for almost half of online retail in the US.
In February 2021 Amazon announced that founder and CEO, Jeff Bezos, would be stepping down to become executive chairman. The CEO of AWS, Andy Jassy, will succeed Bezos.
The main difference between CFDs and other types of trading is the fact that you don't have to own the underlying asset in a CFD trade. With CFDs, you merely speculate on the movement of prices, instead of being a minority owner and having an ownership stake. You will however still benefit from corporate actions such as dividends.
Many financial markets out there have rules in place to stop traders 'going short.' However, CFD markets generally allow this strategy. Going short simply means opening a short 'sell' CFD position. What this means is you anticipate the price of the stock falling, so you go short and use a buy order to close your trade position at some point in the future – hopefully for a lower price to profit from the slide. CFDs give you the flexibility to trade markets in both directions.
Usually not, as online CFD trading takes place on a global scale. Major markets exist all around the world and Capital.com allows you to access the world’s financial markets wherever you're based.