How to buy, sell and short Apple shares

How to buy and invest in Apple shares

You can buy Apple shares in two ways with IG. You could either use our share dealing service or trade via derivatives. When share dealing, you will own the shares outright and make a profit if the share price goes up. You could also receive dividend payments if the company makes them.

Alternatively, you can speculate on Apple’s share price movements without owning the physical assets. You’ll do this by using CFDs or spread bets. Follow these steps to invest in or trade Apple shares:

See more differences between share dealing and derivatives trading.

How much would it cost to invest in Apple?

To qualify for our best commission on US shares, you have to be an active client and place three or more trades in the previous calendar month. If you don’t want to take ownership of Apple shares, you can also speculate on the share price with derivates. You’ll be able to:

• Get full exposure with a small margin – usually 20%-25% of the full value of the trade¹
• Spread bet without paying any tax²
• Offset your losses against profits for tax purposes with CFDs

How to sell and short Apple shares

Once you have bought your Apple shares, there may be a time you want to sell them – either to take profit or possibly to avoid a loss if you believe the share price could be about to enter a downward trend. You can also go short on Apple’s share price using derivatives if you believe it is going down. To sell or short your Apple shares, follow these steps:

Apple’s live market prices

Apple shares CFD trading

A CFD is a contract in which you agree to exchange the difference in the price of Apple shares from when you open your position to when you close it. You can buy CFDs to go long or sell them to go short.

Apple shares spread betting

When you trade Apple shares via spread betting, you are placing a bet on whether its price is headed up or down. As Apple moves in your chosen direction, you make a profit. If it moves against you, you make a loss.

How to trade Apple options

You can trade Apple options with IG by following the steps below:

1. Research the market
2. Open an IG trading account
3. Decide whether you want to buy or sell puts or calls
4. Call 020 7896 0000 to place your trade
5. Confirm your trade over the phone

Understanding Apple: a brief history

Apple Computer Inc. was formed in 1976 by Steve Jobs and Steve Wozniak. Its stock first went public on 12 December 1980 at $22 a share – at which time Apple’s market cap was already $1.2 billion. Less than a decade later, both Jobs and Wozniak left Apple, resulting in the share price dropping to only $2.

It wasn’t until 1997, when Jobs finally returned, that Apple products really started taking off. First came the iMac Power, then the Mac G4 Cube and Mac OS X operating system, followed by the iPod and finally the iPhone.

The stock posted big gains in 1998 and 1999 with the rise of the dot-com boom but crashed again when the tech bubble burst in 2000. By 2003, company earnings skyrocketed, and the share price began a rapid climb to reach $199.83. However, in 2008, a poor forecast caused the price to drop drastically. The price rebounded only to crash again due to the 2008 market meltdown; this was until impressive sales and profit in 2009 put some major force behind the stock.

In 2011, as Apple was still enjoying its flourishing earnings, Steve Jobs resigned due to illness and died a few months later. Tim Cook was appointed as the new chief executive officer (CEO) when the company’s market cap was around $360 billion, and shares were selling for $380. Apple’s biggest feat came in August 2018 when it was the first publicly traded company to ever reach a $1 trillion market cap.

Apple shares: the basics

Apple shares are listed on the US Tech 100 (.NDX) under the ticker AAPL. If you want to buy, sell or trade Apple shares, you need to understand the details of the business, as well as the factors that impact its share price.

Apple's 39-year share price history

Sales of the popular iPhone are said to be one of the main drivers of the Apple share price, but investors are concerned that these sales are dwindling. The smartphone market is saturated, and products are becoming harder to distinguish from each other, meaning users are considering other options. When Apple launched its latest iPhones in September 2018, share prices started to fall. To make matters worse, the company stopped reporting quarterly iPhone and iPad sales, which did not exactly win the public’s trust.

One of the most important factors to keep an eye on in the coming months is Apple’s services. The business has identified services as the biggest growth driver for the next few years as it aims to generate $50 billion in revenue by 2020¹. Examples of this are its streaming channel and gaming service launches, which could happen as soon as September 2019. The failure or success of these ventures should be an indicator of share price movement.

Apple stock has generally paid shareholders a quarterly dividend since mid-2012. Some investors choose to increase their stake in the company by pushing the dividend back into Apple shares. Furthermore, Apple often buys back its own stock, thereby reducing shares in the market and increasing their value.

Apple’s key personnel: who manages the company?

There are 13 members on Apple’s executive team:

Apple also has a board of directors that oversees the executive team to ensure the interests of all stakeholders and shareholders are being served.

What is Apple’s strategy?

Apple is notoriously secretive, so it’s not clear what new products and services it might have in the works. Up until recently, its strategy was primarily to develop existing products. The last major product release was in 2015 with the launch of the Apple Watch. It now focuses on design and functionality differentiation, and hardware-software integration, rather than new product development. In March 2019, Apple announced that its business model is shifting, and it will now put most of its energy into becoming a digital services provider – with the launch of an Apple streaming channel expected in the near future.

Retail and online store expansion is also important to the corporation, because it seeks a high-quality relationship with the customer.

Apple fundamental analysis: how to analyse Apple

Before choosing to buy, sell or trade Apple shares, it’s important to conduct a thorough fundamental analysis. Fundamental analysis is an in-depth method of studying a company’s financials and external factors to gauge the value of its shares. This method often uses various ratios to determine the value of stock and estimate price movements, such as the price-earnings ratio (P/E), relative dividend yield and return on equity (ROE).

Apple’s price-to-earnings ratio

Apple’s P/E ratio is one way to measure its stock value. Essentially, it explains how much you’d have to spend to make $1 in profit. A high P/E ratio – compared to competitors – could mean the stocks are overvalued.

The P/E ratio is calculated by dividing the market value per share by the earnings per share. The earnings per share are calculated by dividing the total company profit by the number of shares it has issued.

Apple’s relative dividend yield

Dividend yield is a company’s annual dividends – the portion of profit paid out to shareholders – compared to its share price. The relative dividend yield is the dividend yield of a single stock compared to that of the entire index – in this case the US Tech 100. To calculate Apple’s relative dividend yield, first calculate its dividend yield by dividing its annual dividend by the current share price. Next, divide the dividend yield by the average dividend yield for the US Tech 100. A low relative dividend yield could suggest that the shares are overvalued when measured against competitor shares.

Apple’s return on equity

Apple’s ROE measures return on assets – it is expressed as a percentage. ROE is calculated by dividing net income by stakeholder equity. A low ROE could be a possible indicator of overvalued shares. That’s because it would show that Apple is not generating a lot of income relative to the amount of shareholder investment.

Join IG Academy to learn more about fundamental analysis.

How to buy Apple shares

You can purchase Apple shares with IG’s share dealing service within minutes via our desktop platform or mobile trading app. Buying the shares through share dealing means you will own the shares outright and have to pay their full value upfront. Shareholders can profit from share price growth and dividend payments.

There are four easy steps to follow if you want to buy Apple shares:

1. Open a share dealing account: you can open an account with IG in just a few minutes
2. Log in: log in to your IG account and go to your ‘My IG dashboard’
3. Find Apple shares: once you’ve opened and funded a share dealing account, you’ll be able to buy your first Apple shares. Open the platform for your share dealing account, go to the 'finder' panel on the platform, type in and select ‘Apple’
4. Choose how to buy: on the deal ticket, you’ll see two tabs: ‘at quote’ and ‘on exchange’. At quote is our best price from a range of market makers. On exchange means interacting directly with the order book of the relevant exchange.

When you receive confirmation of your transaction, you will see those shares in your account. If the price moves, you will see the change in your account. IG will deposit any dividends into your account as soon as we receive the relevant payment from Apple.

How to sell Apple shares

Once you have bought your Apple shares, there could be a time when you want to sell them – either to realise a profit or to avoid a loss. To sell your shares via the IG share dealing service:

1. Select ‘Apple’ in open positions
2. Click on ‘sell’
3. Choose the amount of shares you’d like to sell
4. Confirm the deal

How to trade Apple shares

Trading Apple shares is different to share dealing because you don’t own the underlying asset. You can go long if you believe the share price will rise or go short if you think the share price will fall. If you decide to trade Apple shares, you can trade with leverage. This means you put down a small deposit – referred to as the margin – to get full market exposure. You need to bear in mind that this amplifies your exposure, as your profit or loss is based on the full size of your position, not the deposit. If you want to open a leveraged position, you can do this with a CFD or spread betting account.

• Apple shares CFD trading

A contract for difference (CFD) is a contract where you agree to exchange the difference in the price of Apple stock from when you open your position to when you close it. To go long on Apple shares, you would buy the market and to go short on Apple shares, you would sell the market.

Find out more about CFD trading

• Apple shares spread betting

If you spread bet on Apple stock, you place a bet on whether the share price will rise or fall. If AAPL moves as you predicted, you will make a profit. But if the stock moves against you, you would incur a loss.

Find out more about spread betting

Sources:

¹ Deposits for leveraged trades are 20%-25% on 99.77% of tier one US shares.
² Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.