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Formerly known as Google, Alphabet Inc. (Alphabet), the parent company of Google and YouTube, is one of the world’s largest technology corporations.
Alphabet has two classes of publicly traded stock: ‘GOOG’ and ‘GOOGL’. Both are similar in that they’re stock symbols for Alphabet; the primary difference is that GOOGL shares (Class A shares) come with voting rights, while GOOG shares do not (Class C shares). Both share classes technically make you entitled to an equal amount of the company's earnings. There are also Class B shares, which are not publicly traded. Each Class B share comes with ten votes and is held by co-founders and company insiders, and in turn involves greater voting power than Class A shares.
Founded in 1998 by Larry Page and Sergey Brin, the duo conceived the idea of a search engine out of their dorms at Stanford University. Initially named ‘Backrub’, the search engine was renamed Google based on the mathematical expression googol. Today, Google is the first reference point for internet users searching for information, with the term ‘Google it’ acquiring verb status globally.
With a market value of US$2 trillion and a workforce of nearly 185,500 (as of 31 December 2023), Google is the largest and most recognised online search engine, having a 90% search market share. In addition to its search engine, Google provides many products and services, including Gmail, Android software, Smartwatches, and more.
Whether you trade the euro versus the US dollar (EUR/USD) in the Forex market, gold, silver or palladium in the commodities market, or individual shares like Alphabet in the stock market, CFDs, or ‘Contracts for Differences’, can be used to speculate and hedge across a wide selection of asset classes.
CFDs are legally binding contracts forged between two parties to commit to exchanging the difference between the opening and closing price of a trade. Unlike physical shares, which entail direct ownership of a company’s shares and often come with voting rights, CFDs are derivative instruments that investors use to buy and sell (and hedge) based on the price movement of the underlying asset in which it tracks; as such, there is no direct ownership with CFDs.
Transactions in the CFD market are usually leveraged, meaning investors can open positions greater than their available account equity. As illustrated in the following, leverage works through margin. Suppose GOOG trades at US$100.00, and you want to purchase ten shares. Unleveraged, this would incur an initial investment of US$1,000 (10 * 100). However, investing in GOOG Share CFDs with FP Markets with a 20% margin rate, you would only have to ‘deposit’ 20% of the full value to trade an equivalent position size of ten shares at US$100 per share: US$200.00 (1,000 * 0.2).
1. Open an FP Markets Forex and CFD Trading Account
To begin investing in GOOG Share CFDs with FP Markets, you’ve got to open a Forex and CFD trading account. Visit the FP Markets homepage and click ‘OPEN LIVE’, which will take you to the Account Application page; the process is straightforward.
2. Download your Trading Platform
Informed investing requires the right tools. With FP Markets, you have access to world-class trading platforms, including MetaTrader 4 and 5 (MT4/5), cTrader, and TradingView.
Using the login details sent to your registered email address after your account was approved, log in to the FP Markets Client Portal, select ‘Platforms’ from the main menu on the left, and download your preferred trading platform. Most investors opt for MT5 when trading Share CFDs; however, you can trade GOOG on MT4 and MT5 with FP Markets.
3. Find the GOOG Ticker
Once you have access to your platform – let’s assume you’ve chosen MT5 to trade with – press Ctrl+M to open the Market Watch tab. Displayed in tabular format, Market Watch allows you to view all available bid and ask quotes you can trade with FP Markets. To show all available symbols, right-click on your Market Watch tab and select ‘Show All’.
To add the GOOG ticker to your Market Watch, type ‘GOOG’ into the ‘click to add’ function at the bottom and select the stock. You may then drag/drop the stock to the main chart’s interface and adapt its properties to suit your trading strategy and preferences.
4. Place the Buy or Sell Order
Buy or sell orders on the MT5 platform can be executed through the order window (F9), shown in the centre of the chart below. ‘Type’ refers to your order type: ‘Market Execution’ or ‘Pending Order’. Both are orders to buy or sell GOOG, though the former requests immediate execution at the next available market price, while the latter involves placing an order to buy or sell below or above the current market price.
Volume reflects the trading volume, and Stop Loss and Take Profit values can then be entered according to the price level that your analysis suggests. Once these data are entered, click the buy or sell tab to execute the trade.
Another common method of placing buy and sell orders in MT4 or MT5 is using the One-Click Trading application (Alt+T) located in the chart's upper left corner. Its presentation is simple, as shown below, allowing investors to enter their trading volume and click buy or sell. However, one major drawback of One-Click Trading is the lack of risk management solutions. This must be done in the trading terminal (Ctrl+T) after the trade is active.
Taking Long and Short Positions Using Share CFDs:
Alongside most of the Magnificent Seven stocks, the price of GOOG took a hit after reaching an all-time high of US$193.91 earlier this year. With the recent correction, along with a forward PE (price-to-earnings) of around 20 times and a market capitalisation of US$2 trillion, this is a stock many investors have been watching closely, having already rallied 17% year to date (of note, nevertheless, the S&P 500 is up 20% year to date).
The threat to the company remains the emergence and widespread adoption of generative artificial intelligence (AI) and the damage it could do to Alphabet’s search engine.
88% of analysts polled by Reuters were bullish on the stock, while 12% supported a hold recommendation. With a share price of US$164.64 (as of 23/09/2024), the current median price projection for the company’s share price is US$204.50, while the mean price projection is slightly lower at US$200.58.
Unquestionably, the stock remains in a firm uptrend, which investors will likely monitor closely for dips to possibly ‘buy into’. July’s bearish outside reversal on the monthly chart and subsequent downside pressure in August, as well as the spike lower this month, could increase the interest of long-term bulls. Adding to this, the month is set to end in the form of a bullish hammer candle (red arrow) from support at US$52.27. From a technical point of view, this highlights the potential to push higher into the year-end, possibly challenging the record high of US$193.91.
Chart Created Using TradingView
Share dealing involves buying and selling physical shares in a company that is publicly traded on a stock exchange.
Through an investment brokerage, investors can purchase company shares and become a part owner of the company in proportion to the number of shares purchased. In addition to capital gains, investors may receive dividend payments and voting rights.
The futures and options markets are another option for investing in GOOG. Like CFDs, futures and options contracts are derivative instruments that track the underlying price movement and allow investors to trade based on this price action.
A futures contract commits both parties to transact until the expiration date (or before). In contrast, the commitment for an options contract falls only on the contract holder to buy or sell (the writer, however, is obligated to buy or sell should the contract holder decide to buy or sell; in return for this obligation, they receive a premium paid by the contract holder).
ETFs are pooled investment products, and shares of these funds can be bought and sold on a stock exchange, just like regular stock. These are often categorised as either passively or actively managed funds.
Of relevance, ETFs can either be physically backed or synthetic ETFs (created through derivatives). Crucially, they are available across a range of asset classes, though it is important to note that an ETF normally tracks an underlying index rather than an individual stock. Consequently, the performance of the ETF and GOOG will not be the same.
1. Does GOOG pay a dividend?
Yes, GOOG pays an annual dividend of 0.48%.
2. What are the major differences between CFDs and physical shares?
Leverage and ownership are some of the key differentiating points between CFDs and physical shares. CFDs have greater leverage than physical shares, with the latter often being invested in using no leverage. When investing in physical shares, investors become partial owners of the company, while CFDs are cash-settled derivatives that do not bestow ownership on either party of the contract.
3. Can I trade GOOG on MT5?
With FP Markets, GOOG can be traded on MT5 and cTrader.
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