- Thinking about picking up shares of Carnival Cruise?
- Learn what to look for when selecting a broker.
- Evaluate different types of trades.
Carnival Corporation (NYSE: CCL) is a leading cruise liner company. CCL took a massive hit to its business with the onset of the pandemic in 2020. However, with travel expected to resume growth, we can expect the share to recover, offering excellent buying opportunities for traders.
If you want to buy Carnival shares from Australia, this brief guide has everything you need to know.
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Founded in 1993 by Micky and Ted Arison, The Carnival Corporation is the world's largest cruise liner company, operating out of its headquarters in Miami, FL. Carnival operates cruises under its own name as well as Princess, Cunard, and Holland America.
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Step 1: Open a trading account
If you want to start trading CCL, you'll need to sign up with a broker. Brokers’ offers vary, and it pays to shop around for the best deal for new traders. Your broker should offer you the following.
Look for brokers offering no commissions on any of your trades. After the rise of Robinhood's trading app, most of the big brokers adopted the zero-commission model to remain competitive.
Fractional share trading
If you start a small account with $300, fractional shares give you exposure to the price action in Carnival share without taking a massive risk with your account. You can buy a 1/10th of a share and gain exposure to price action to make a profit.
Low account fees
Brokers compete with each other for your business. Therefore, shop around for the best available fee schedule. Compare transaction fees, commission structures, inactivity fees, and account fees.
Your broker should offer you an option to take a cash or margin account. With a cash account, you can only trade your account balance. However, a margin account lets you "leverage" your account. For example, if you have $300 in a margin account at 6:1 a margin ratio, you can buy up to $1,800 worth of share.
However, margin trading is risky and best avoided until you have more experience trading.
Real-time data and charts
Most brokers provide charts, but you won't get live quotes, only delayed prices. You'll need to buy real-time market data for live pricing.
Step 2: Add funds to your trading account
To fund your trading account, you'll need to wire money to your broker or make a deposit using a debit card. Depending on how you transfer funds, it may take several days for it to clear into your trading account.
Step 3: Decide how much to invest
When funding your trading account, start with a small amount. There's no need to invest a large amount until you have real trading experience so you don't risk more than you can afford to lose on a bad trade.
Step 4: Choose between shares of stock or ETFs
After setting up and funding your trading account, it's time to buy some shares. You have two choices for gaining exposure to Carnival. You could purchase the share outright or buy an ETF.
ETFs are financial vehicles containing the share of multiple companies in the same sectors or geography. The Vanguard Mid-Cap ETF (VO) or the SoFi Social 50 ETF (SFYF) are good examples of ETFs offering exposure to CCL price action.
Step 5: Set up your order
After choosing your asset class, it's time to place your order. Here are the four common order types used in trading.
The market order gets you into CCL at the next price available. However, this order type can derail your trading plan. For instance, you might want to get into the share at US$50. However, the broker might fill you at a higher price, depending on the market's movement. Any amount you pay above your intended price is what's known as "slippage."
The limit order is the best choice for day traders. You set a limit on the price you're willing to pay for the share. For instance, you set up a limit order to buy at US$50, and you won't be paying any more than that price to enter the share. While limit orders prevent slippage, they can also result in partial or missed fills in fast-moving markets.
This order lets you sell when you reach your price target. Let's say you enter at US$50 and want to sell at US$60. You enter your stop limit, and the broker liquidates your position when the market reaches your target, locking in a profit.
This order type helps you manage risk. If you get into CCL at US$50, you'll set your stop limit at 5 to 10% below your entry. The stop loss acts as a safety net. If the price falls below the stop, the broker executes a sell order to get you out of the trade and limit your loss.
Step 6: Place the order
In your trading platform, complete the order form with the ticker symbol, the limit price, and the number of shares you want to buy.
Step 7: Monitor how Carnival performs
Carnival stock reached an all-time high in mid-2018. The company was already experiencing a decline before the pandemic hit in 2020. CCL fell on the news of the Diamond Princess experiencing an outbreak onboard the ship.
However, in 2021 CCL experienced a recovery in the wake of the pandemic, presenting buying opportunities as travel opens up around the globe. Other shares like Carnival in the travel sector for comparison include Royal Caribbean (NYSE: RCL), Norwegian Cruise Line Holdings (NYSE: NCLH), Delta (NYSE: DAL), American Airlines (NASDAQ: AAL), and Hilton (NYSE: HLT).
Disclaimer: We put our customer's needs first. The views expressed in this article are those of the writer alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty Australia and/or the writer may have a financial interest in the companies mentioned, direct shares or an ETF. Finty Australia is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. However, do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty Australia’s editorial guidelines and terms and conditions.