Where and how to trade Spotify – one of the hottest tech stocks to list in 2018…

Here’s how and where to trade Spotify shares.

Unless you have a very big beard or still insist on listening to vinyl in a dark and dingy basement you will probably have come across the music streaming in one form or other. Spotify, allows users to listen to pretty much all music ever made (with a few exceptions) through their phones or online. It’s free, if you can suffer a few adverts, or around $10 a month.

Here’s a quick run down of how to speculate on Spotify shares.

First, how to trade Spotify shares?

There are three ways, buy them outright, CFDs or spread betting. Here’s a quick run down of what each one is.

If you want to buy them you need a stock broker that offers US shares. You pay for them in full and they sit on your account until you decide to sell them. It’s worth noting that you have to buy them in USD so will have to convert GBP to USD to do so. Double check what your broker’s conversion rate is as this can be quite a large hidden cost. If you are buying a massive amount, it’s worth having a USD denominated stock account and using a currency broker for the conversion.

You can also trade through CFDs or spread betting. Both allow you to trade on margin using leverage. Leverage enables you to get exposure to more shares than your funds on account. As Spotify is a tech stock and a new listing the margin rates are going to be high (around 50%) so with Spotify CFDs or spread betting you could buy $10,000 with only $5,000 on account. Of course this increases the risk reward ratio meaning your profits and losses are multiple twice.

One of the other benefits of Spotify spread betting and CFD trading is that you can speculate on the shares going down as well as up. If you think the price of Spotify shares will drop you can go short. You sell shares, then buy them back later, at a profit if the price drops (obviously at a loss if they go up).

With Spotify CFD trading and spread betting you can also trade in GBP. Which means you can work out your P&L without having to factor in GBP to USD currency conversions. Depending on your broker or bank these can cost around 5% so if you are just interested in taking short term speculative positions trading in your local currency can reduce your trading costs.

There are tax advantages to spread betting on Spotify rather than CFD trading as profits on financial spread betting are currently free of capital gains tax.

Secondly, where to trade Spotify shares.

You need a broker that offers Spotify stock trading. ETX Capital are currently offering Spotify CFD and spread betting and have produced a handy guide to trading Spotify on their website. Below is a screen shot of the Spotify on the new ETX Capital Trader Pro Platform.

You can compare other spread betting, CFD and stock brokers for trading Spotify in our comparison tables.

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Trading Risk Warning

ALL INVESTING INVOLVES RISK. Investing, Derivatives, Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
ESMA & FCA Risk Warning – “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 68-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk”

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ALL INVESTING CONTAIN RISK: The information contained in this website is for informational purposes only and does not constitute financial advice. The material does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. Always seeking independent financial advice.