- Looking to start trading Boeing shares?
- Get exposure to manufacturing, defence, and space.
- Compare broker offerings and trading strategies.
Boeing (NYSE: BA) is one of the world’s leading aerospace and weapons manufacturers. Reaching an all-time high in March 2019, the stock subsequently fell due to the grounding of the 737 MAX after multiple safety issues, the pandemic-driven drop in air travel, and the cancellation or delay of new plane orders.
If you want to invest in Boeing for exposure to the aviation sector, read on for your step-by-step guide to buying from Australia.
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Founded in July 1916 by William E. Boeing, BA has headquarters in Chicago, IL. The company has several contracts with the federal government and the private sector, making it a solid blue-chip investment with exposure across civilian and military aviation, space, and services.
Boeing also provides day trading opportunities in volatile markets trading around movements in the travel and weapons industry.
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Step 1. Open a trading account
If you want to trade Boeing shares, you'll need to sign up with a broker. Here are the critical features to look for in a prospective broker.
After the introduction of Robinhood's commission-free model in 2013, it didn't take long for other brokers to follow suit. In today’s broker environment, there's no reason why you should ever have to pay commissions when buying shares listed on the US markets.
Fractional share trading
Fractional shares allow you to invest in as little as a tenth of a share of BA. As a result, you can have much less of your account value invested in one trade and diversify your investments.
When you sign up with your broker, they will provide a proprietary trading platform. However, many brokers lack the functionality necessary for trading and analysis in fast-moving markets, especially for day traders. However, as is the case with TD Ameritrade, many brokers allow you to plug in an aftermarket trading platform and a charting package, like Sterling Pro and Trading View.
Low account fees
With brokers competing for your business, shop around for the best fee schedule you can find. Look for low account fees, no inactivity fee, and minimal transaction fees.
Trading on margin
Some brokers offer two account types: cash or margin. With a cash account, you can only trade the balance reflected in your account. With a margin account, you can effectively borrow money from your broker. Most margin accounts come with leverage from 3:1 up to 6:1. Therefore, if you have $500 in your trading account at 6:1 leverage, you can trade up to $3,000 of shares. This strategy can be expensive if your trade doesn’t pan out, as you may have to put up additional capital to cover the margin loan.
Real-time data and charts
Your trading platform should include a basic charting package. However, the broker won't provide you with real-time data feeds. You'll typically need to pay an extra fee for live market data.
Step 2: Transfer funds to your account
You can use a bank transfer or debit card to fund your trading account. However, many — but not all — brokers will not let you use a credit card to fund your trading.
If you are opening a new trading account, it might take the broker some time to verify your identity, clear your funds, and let you trade.
Step 3: Decide how much to invest
When funding your account, it's critical that you don't put everything you have into the trading account. The allure of making a profit might seem appealing, but it's a risky move to put your life savings into trading and potentially lose everything.
Step 4: Choose between company shares or ETFs
When you're ready to place your trade, you have the choice of buying the stock outright or buying an ETF containing Boeing stock. ETFs (exchange-traded funds) are investment vehicles containing the shares of several companies. ETFs typically have a theme, for example, an aviation ETF would be focused on companies in aircraft manufacturers, airlines, etc.
The Invesco Aerospace & Defense ETF (PPA) and the ARK Space Exploration & Innovation ETF (ARKX) are examples of ETFs with exposure to Boeing.
Step 5: Configure your order
When placing a trade on your trading platform, you can select one of the following order types.
The market order gets you into BA shares at the next quoted price. However, your order could fill above your intended entry. If you want to enter BA at US$100, you might end up filling at a higher or lower price. The difference in price is known as "slippage."
The limit order prevents you from getting slippage on your order. You enter your limit price, and the broker won't fill you above that price. However, if markets are moving fast, the broker might not get the chance to fill your order, or you might get a partial fill.
This order lets you sell your position when you achieve your price target. For instance, you enter BA at US$100, and you set a stop limit to sell at US$120.
The stop loss acts as a risk management tool for new traders. If you enter BA at US$100, you'll set your stop loss at US$95 or US$90, depending on your risk tolerance. If the price drops, breaking this level, the broker liquidates your position. As a result, you prevent your trading account from taking a loss you can't afford.
Step 6: Submit your order
After selecting your preferred risk appetite and order type, it's time to use your trading platform to place your trade.
Your trading platform requires you to complete the fields for the ticker symbol, the number of shares you want to buy, and your limit order price. Once you click the buy button, your trade will execute as configured.
Step 7: Monitor Boeing’s performance
As an aerospace and technology company, market news like the company experiencing electrical problems with the 737 Max airplane or the loss of major defense contracts will impact the stock price. Similarly, a drop in travel caused by the coronavirus pandemic reduced orders for new aircraft, causing the stock price to slip. Air shows such as Farnborough, Paris, and Dubai — where airlines announce large orders — can move the stock too.
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