How to buy Shopify (SHOP) stock

By   |   Verified by Andrew Boyd   |   Updated 1st December 2021

how to buy Shopify (SHOP) stocks
  • Ready to pick up shares of Shopify?
  • Learn what to look for in a broker.
  • Find out which order type suits your trading strategy.

Shopify (NYSE: SHOP) is one of the world's leading e-commerce platforms. The company offers a business-in-a-box for sellers and an exciting shopping venue for consumers. Its proprietary e-commerce platform provides a unique experience for both sellers and buyers.

If you're looking to invest in Shopify, this guide has everything you need to know about where and how you can buy Shopify stock.

Company overview

Shopify is a Canadian firm with headquarters in Ontario. Founded in 2006 by Tobias Lütke, Daniel Weinand, and Scott Lake, The company netted over $2.9 billion in revenues for 2020, up 96% compared to the year prior. Competitors include Amazon (NASDAQ: AMZN) — who bought Shopify competitor, Selz, in a defensive move — as well as marketplaces like eBay (NASDAQ: EBAY), Poshmark (NASDAQ: POSH), Coupang (NYSE: CPNG), Mercado Libre (NASDAQ: MELI), Ozon (NASDAQ: OZON), and Jumia (NYSE: JMIA).

Where to buy Shopify stock

Moomoo

On Moomoo's website

Highlights

  • Trade blue-chip stocks in US, HK and SG Markets.
  • Wide array of investment choices such as stocks, stock options, futures, ADRs, Exchange Traded Fund (ETFs) and REITs.
  • Manage your assets, portfolio and investments across multiple markets.

Looking for a stock broker to buy PayPal shares? Use our online broker comparison to compare brokerage fees and much more.

Step 1: Selecting a broker

To trade Shopify stock, you need a brokerage account. The broker forms the conduit between you and the market. Here is what you need to look for when comparing brokers’ offerings.

Commission-free trading

With Robinhood, Webull, M1 Finance, and Stash attracting millennial and Gen Z traders with zero commissions, many large brokerage firms followed suit and are now offering zero-commission trades. Since commissions are the biggest trading expense, choosing a no-commission broker helps you build a small account faster.

Fractional share trading

Shopify stock is expensive. To access price action in the stock, you'll need to find a broker that offers fractional share trading. Fractional shares reduce your risk in the market by allowing you to invest in as little as a tenth of a share so you can diversify your risk across multiple companies rather than concentrating your account in one company.

Low account fees

Compare the fee schedule between brokers and look for the difference in transaction costs, monthly account fees, and inactivity fees. Fees eat into trading profits, so save wherever you can.

Margin trading

Your broker should offer margin trading facilities. For example, with a margin of 6:1 on a $300 account, you can trade up to $1,800 worth of stock. However, be aware that margin trading can result in losses greater than your account balance if the market turns against you, requiring you to deposit more funds.

Real-time data and charts

Broker trading platforms come with charts, but the data feed can be delayed by up to 15 minutes. To get live market data, you'll have to subscribe to the service for an additional fee.

Step 2: Fund your trading account

Brokers let traders fund accounts using bank wire transfers and debit cards; many brokers will not accept credit card deposits. When funding your account, it may take the broker several working days to process your application, verify your identity, and approve your trading account.

Step 3: Decide how much you want to invest

When trading, you'll need to understand the basics of risk management. For instance, putting all your money into a single trade is a very risky move. Unless you have a crystal ball predicting market moves, this kind of risk could end up with you losing a lot of money if the price moves against you.

Traders, especially new traders, should never risk more than 5% of their total account balance on any single trade.

Step 4: Choose between shares of stock or ETFs

When you're ready to commit to trade, you'll need to decide if you want to buy Shopify stock directly or purchase an ETF.

ETFs (exchange-traded funds) are investments in a weighted basket of stocks using a sector or geographic strategy.

With an ETF, you get exposure to price action in Shopify. However, you spread your risk across several other companies, reducing the chances of taking a loss that wipes out your account balance. A great example of an ETF offering you exposure to Shopify stock is the ARK Next Generation Internet ETF (ARKW). Others include Franklin Disruptive Commerce ETF (BUYZ), and Simplify Volt Fintech Disruption ETF (VFIN).

Step 5: Set up your order

After settling on your risk management strategy and funding your account, you'll use the following order types to manage your trade.

Market order

The market order lets you buy at the next available market price. However, there is no guarantee that you'll get the price you want when you click the buy button. The broker could fill you at a higher price than you had planned.

Limit order

The limit order is the preferred choice of day traders for entering any stock. With a limit order, you set the price you're willing to pay for the stock, and the broker will only fill you at this level without any slippage. However, if the price action surges, your order might not fill, or you might end up with a partial fill.

Stop limit

The stop-limit lets you sell your stock after achieving your price target. If you enter at $1,000, and you want to sell at $1,100, you'll set your stop limit to that price, and the broker automatically cashes you out of the stock when it reaches your price target.

Stop loss

The stop loss is a risk management tool for new traders. This order type mitigates the risk of blowing up your account on a single trade. If you enter at $1,000, you'll set your stop loss at $950. If the price drops below this level, the broker automatically liquidates your position, preventing catastrophic loss.

Step 6: Place the order

After reviewing the different order types and settling on your risk management strategy, it's time to place your order. Open the trading platform, enter the ticker symbol, and fill out the fields asking for your share size, order type, and limit price. When you're ready to place a trade, click the buy button.

Step 7: Monitor performance

Shopify stock moves on earnings and other industry-related news involving the retail sector. The company might not have the depth of Amazon, but it offers a productive swing or long-term trade, showing steady growth since its IPO.

Keep your eye on newsletters for the e-commerce sector as well as earnings reports and press releases which offer traders exciting announcements that make the price of Shopify move.