When it comes to genuine global brand recognition, sitting atop most surveys is the Cupertino-based Apple, Inc. Forbes recently ranked Apple, Inc as the world’s most valuable brand. Apple’s iPhone has revolutionised communication around the world.
Naturally when it comes to international shares, Apple is perhaps one of the first stocks that springs to mind. But with many phone makers snapping at Apple’s heels, is the stock still a good buy? And how do you trade Apple’s shares from the UK?
You can either:
- Buy Apple shares through a stockbroker as an investment (for long term growth) such as:
- Buy Apple shares through a CFD or spread betting broker (if you think they will go up in the short term) such as:
- Short Apple shares through a CFD or spread betting broker (if you think they will go down in the short term)
Given the size of Apple’s global operations, many factors impact the company’s earnings. From Sino-US trade war to consumer taste to exchange rate movements – all these factors can impact Apple’s share price over time.
Unlike crude oil or forex trading, company earnings are very important when analysing individual shares. The first port of call is to understand some of Apple’s recent quarterly filings with the SEC. These is available from Apple’s website.
From these reports you can distill some interesting and relevant company trends. For example, in Apple’s most recent quarterly report – also known as form 10-Q (released July 31) you will find a few interesting trends. Falling iPhone sales is one; broadening sources of income is another. The fact that Apple is able to diversify gradually away from iPhone is applauded by the market. Also pay attention to any stock buybacks.
The next step is to understand some of Apple’s most recent products, notably from big tech conferences in the US (e.g., San Jose Convention Centre on June 3). Big product announcements can rejuvenate a stock as investors project bullish earnings from these products.
However important fundamentals are, sometimes it is necessary to pay attention to a company’s stock price.
Apple was the first stock in this bull cycle to climb above US$1 trillion in market capitalisation. The tech titan reached this milestone on August 2, 2018 when its share price soared to $207.39. The stock peaked at $232.07 on October 3, 2018.
But the late-October ’18 correction saw price slump by nearly 40%! In stock markets, one rule to bear in mind is this: Anything can happen at any time. This element of unpredictability can not be diversified away.
Currently, Apple prices are about 10% below its all-time high. Given the intense volatility at around current price levels ($210-220), it would take more bullish news for Apple to break into record territory.
The good news for potential Apple Inc. traders is that some UK stock brokers offer an international share dealing service. One thing to remember before signing up to a broker is not to solely rely on their headline trading fees. This is because of currency fees, which might not be initially apparent, and could be high, pushing up your dealing costs considerably. Also, if you are holding the shares in an ISA, our beloved HMRC do not allow foreign currencies to be held in them, resulting in your trading proceeds needing to be converted back into sterling. Some brokers offer a service whereby you are able to hold foreign currency in the account, which means there is less pressure to convert back into sterling each time you sell.
A useful comparison website for finding the best brokers for trading Apple Shares and offering international share dealing is in our compare stock brokers comparison table, which provides a list of some of the best known online UK stock brokers, including CFD broker IG, Hargreaves Lansdown, Barclays, Interactive Investor and TD Direct, in an easy to read format, showing information that allows you to make an informed decision and resulting with you being able to employ one of the best brokers for trading shares such as Apple Inc.
The biggest risk from trading Apple is that you are on the *wrong side* of the trend. When you realise this, abandon the trade as soon as possible. Do not hope that the market will turn in your favour soon – because it may not. Many traders use stop losses strictly to prevent a losing trade from ballooning. You should do so too.
Another risk comes from Apple’s price pattern. In other words, when Apple’s shares are not ‘trending’ sufficiently up or down, it becomes harder to exploit price movements because there is insufficient distance between entry and exit points.
The last point relates to high volatility. For example, Apple’s share price spiked up after the Fed meeting on July 31 but slumped the very next day when Trump announced new tariffs on Chinese goods. These volatility will cancel trade signals quickly potentially resulting in minor losses.
To learn to trade Apple shares, you will need to stay attune to Apple’s day-to-day behaviour. Remember, you do not trade markets. Rather, you trade your beliefs and understanding about the market.
Price breakouts are very important, especially when accompanied with gaps. A gap occurs when today’s trading range is completely outside yesterday’s trading range. New highs after some time are also important because it can create upward drifts.
Paper trade for a few months. Work out if the stock is suitable to your trading strategy. Not all do. So select your universe carefully.
Can you invest and make money from Apple?
Of course, if you buy low and sell high! However you can also lose money quickly. Look at Apple’s share price over the 12-month period: Massive upswings and deep consolidations. For investors that are biased towards the long side, watch to buy mostly on corrections.
You need to deal with probability too. Nobody get it right every time. Sometimes you win, sometimes you lose. To win out in the long run, you have to cap your losses and max your gains.
Position-sized your trade in a way that even if prices move significantly against you the overall portfolio remains viable.
Jackson has over 15 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.