How to buy Netflix (NFLX) shares from Australia

• Looking to buy Netflix shares from Australia?
• Learn what to look for in an online broker and how to open an account.
• Understand how different types of trades work before you invest.

Netflix pioneered streaming entertainment and has benefitted from widespread high-speed broadband and the trend for unbundling.

It’s now very easy to buy Netflix (NASDAQ: NFLX) shares from Australia. You can't buy Netflix shares from the Australian stock exchange, but there are plenty of online brokers available with access to the NASDAQ where they are listed. This guide will walk you through the process.

Company overview

Netflix, the hugely popular streaming service for films and series, started in 1997 in Los Gatos, California as a DVD rental service.

Today, Netflix is one of the world's top tech companies, alongside Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Google (NASDAQ: GOOG).

Step 1: Choose a broker

You will need to find an online broker that lets you invest in US shares from Australia. Fortunately, there are several of these available. There are some key features to look for when choosing a broker.

Commission-free trading

A lot of platforms giving access to US shares offer this feature. The cost of share trading can add up, and not having to pay commission can really save you money. Stake and eToro are both good options for Australians.

Fractional share investing

Fractional share investing means you can buy a part of a share rather than the whole thing. Because Netflix shares are quite expensive, this may be something to consider.

Easy-to-use trading platform

Trading in shares needn’t be complicated, so keep an eye out for a trading platform that is straightforward to use.

Research and reporting

Look for a platform that has a solid research and reporting section that can give you important information about Netflix, including company overview, price history, recommendations and price forecasts.

Step 2: Fund your account

You may need to make the minimum deposit into your account before it fully activates. Most brokers offer a number of options for funding your account.

Keep in mind it may take a few days for the funds to clear, so you may not be able to trade straight away.

Step 3: Decide how much you want to invest

As mentioned above, most online brokers give you the option to buy fractional shares. You might find this appealing if you are a beginner.

Fractional investing also lets you average down over time. In other words, when the share price drops, you can make your trade and benefit from a lower average cost with more potential for gains.

Step 4: Buy shares or an ETF?

You can buy shares directly and own them, or you can choose to invest in an Exchange Traded Fund (ETF) that includes Netflix. The latter is similar to a mutual fund and is a more diversified option. They are not usually so interesting to active traders, because you have less control over where your money goes.

ETFs with exposure to Netflix include Invesco QQQ Trust (QQQ), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO).

Step 5: Decide your order type

You can choose different types of orders to customise when you buy and for how much. The most common order types are:

Market order

An order to buy/sell shares immediately. This guarantees the execution of the order, but not the price.

Let’s say Netflix shares are trading at US$500. You place a buy order but by the time the order executes the price has dropped to US$499.50. Your purchase will go through at a lower price. The same principle applies for price rises.

Limit order

For buy limit orders, execution-only happens at the nominated price or lower. For example, you may want to purchase Netflix stock for no more than US$480. Submit a limit order for that amount and it will only be executed if the Netflix share price falls to US$480 or below.

Stop limit

This type of order means your shares are sold at a specific price or higher. Let’s say you want to sell your Netflix shares at US$490 a share. When the shares reach that price, your stop limit order executes.

Stop loss

You set a price at which you decide it is no longer worth holding your shares. Let’s say for example you nominate US$420 as the price at which you will sell your Netflix shares. If the price drops to that level, your stop loss order will execute.

Step 6: Place your order

Once you have chosen the type of order you want, it's time to move forward with it. Make sure you have familiarised yourself with the available options for controlling your order; this will help you achieve your desired outcome.

Step 7: Monitor how your Netflix shares perform

Once you have bought Netflix shares, you need to observe and monitor performance.

Stock markets are very volatile, and the value of a company's shares can go up or down after company announcements, reports or activity from competitors.

Try to keep on top of the latest developments that relate to Netflix and the entertainment industry to give yourself an idea of what your next move should be.