How to Buy Amazon Stock: Where to Purchase and Get a Free Bonus

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Investing in blue-chip stocks like Amazon can build the foundation of a strong portfolio. With a market cap now north of $1.86 trillion, Amazon is one of the biggest and most successful stock stories in the American markets. Looking to learn how to buy Amazon stock for your portfolio? This detailed guide will walk you through each step of the process.

How to Buy Amazon Stock

Before buying Amazon stock, you’ll need to consider a few investment requirements first. You can’t buy stocks directly from a bank account; you’ll need to open a brokerage account from a reputable firm like Charles Schwab, Fidelity, Robinhood or Interactive Brokers. Once your account is open and funded, you’ll need to research your favored stocks and ensure they fit into your current financial plan.

1. Open a Brokerage Account

Opening a brokerage account allows you to buy and sell investments like stocks and ETFs. The process is straightforward and can be completed entirely online or through a smartphone, especially if you use a mobile-friendly trading platform like Robinhood. 

First, research different brokerage firms to find one that aligns with your investment goals and trading style. We’ll use Robinhood’s app as an example to demonstrate how to buy Amazon Inc. (Nasdaq: AMZN), but the process is similar for all brokers. Choose the trading platform that best suits your needs. 

Once you’ve chosen a broker, download their app on your mobile device (or navigate to their website) and visit the account opening section. You’ll complete an application with your personal information and employment details here. Be prepared to have documents like:

• Government ID (driver’s license, passport, or other suitable form)
• Social Security card
• Proof of residence
• Proof of employment

If you want to engage in advanced trading activities like options or futures, you’ll need to undergo a more extensive verification process compared to an investor looking to simply buy and hold Amazon stock.

You’ll also need to select the type of account you want and link your bank account for funding. Robinhood’s default option is a margin account, but you can also open a cash account or an IRA. After applying, the broker will verify your identity and review your information. Once approved, you’ll be ready to fund your account with money and start investing in Amazon stock.

2. Fund Your Account

Funding your brokerage account is the first step toward buying Amazon stock. Brokers like Robinhood offer several convenient methods for depositing money. The most common option is linking your bank account, allowing quick and free electronic transfers. You can initiate transfers directly from your mobile device; tap the Transfer tab and select how you want to send funds.

Although slower than electronic transfers, some stockbrokers accept checks. You’ll need to mail the check to the brokerage’s designated address, following their specific instructions. The least cost-efficient funding method is a wire transfer. While it ensures same-day availability, wire transfers often come with additional fees. This method may be suitable for larger deposits or urgent situations.

3. Search for Amazon Stock (AMZN)

Here’s how to find Amazon stock on Robinhood’s brokerage platform. The process will be similar on other brokerage platforms; you’ll just need to find a search bar and type in the stock ticker symbol.

• Launch the Robinhood mobile app or use a computer to access your Robinhood account on their website. Then, locate the search bar at the app screen’s bottom center or the website’s top right corner.
• Enter the AMZN ticker symbol for Amazon stock and wait for it to appear in the search results. You’ll see an assortment of stocks with similar names or tickers, so be sure to select the correct one.
• If you choose Amazon from the stock ticker results, you will be directed to the Robinhood mobile app’s dedicated Amazon stock page. You can review the chart, see company headlines, and buy or sell shares from here.

4. Place Your Order

Stock orders come in different types, and you’ll need to specify which order you want to use to buy your AMZN shares. Order types can get complex, but you’ll mostly use market orders or limit orders to purchase individual stocks like Amazon.

Market Order

If you want to buy AMZN shares immediately at the current market price, you’ll use a market order. Robinhood will try to fill your order as fast as possible, but the exact cost per share might be slightly higher or lower than the initial price quoted since the market is constantly moving. Highly liquid stocks like Amazon won’t see much of a price gap, but a market order can be risky if you’re trading illiquid or volatile stocks.

Limit Order

Use a limit order if you’re willing to wait until shares hit a preferred price. You’ll enter the maximum price you’re willing to pay for an AMZN share and put the order out into the market. Your broker will only execute the order if the stock price drops to your limit price (or lower). Limit orders allow for more precise trading and can remain active indefinitely.

No matter which type you choose, you'll need to specify the number of shares you want to buy or the dollar amount you want to spend if your broker allows fractional shares to be traded. Enter the amount you wish to purchase, such as 100 shares or $10,000, and hit Buy.

5. Review and Confirm Order

Remember when your math teachers always reminded you to check your work? It may have been tedious then, but now it’s a critical step to ensure your investment is entered to your exact parameters. After punching in your order, you’ll move on to the Review screen to verify your information before submitting.

A typo can be disastrous at this stage, so always double-check your work before hitting submit. For instance, if you want to buy $10,000 worth of AMZN shares, ensure the Amount box displays four zeros, not five. There are no ‘redos’ when buying stocks; if a buy order with a mistake is executed, you’ll have to sell the shares back and attempt the trade again. This could involve more transaction costs and commissions (plus Amazon may not be trading at your preferred price by the time you reattempt the buy), so take 30 seconds and confirm all details before submitting your order.

Managing Your Investment 

Brokerage platforms like Robinhood offer a range of tools to streamline your portfolio management process. Here's how you can leverage them to track your AMZN investment effectively:

Tracking and Performance Monitoring

Most platforms provide an intuitive dashboard displaying your entire portfolio, including individual stocks like AMZN. This gives you a quick snapshot of your holdings, current prices and overall portfolio value. You can also track the performance of each investment over time, allowing you to identify gainers and losers.

Alerts and News

Many platforms allow you to set up price alerts for specific stocks. You receive notifications on your smartphone when the stock price reaches a certain level, prompting you to take action if needed. Additionally, some platforms integrate with financial news feeds, keeping you updated with relevant articles and announcements about AMZN and the broader market.

Research and Analysis

Many brokerage platforms offer built-in research tools and access to third-party resources. These allow you to track financial metrics and stats like market capitalization, earnings data, sales growth and share volume. You’ll also get detailed coverage of Amazon’s business divisions, such as Amazon Web Services or Amazon Fresh, analyst ratings and insight from financial experts, which can be invaluable for investment planning.

These portfolio tools let you monitor your investment performance, empowering you to make decisions based on real-time data and relevant news. Investment management is critical in understanding when to rebalance your holdings, consider risk reduction, or add more shares. And with mobile trading platforms, you won’t need to be connected to WiFi to access these features.

Factors to Consider Before Investing in Amazon Stock

Before investing in AMZN shares, consider your financial situation and develop a plan. The stock market is complex and dynamic and you must be ready to adapt quickly as an investor. Before delving into Amazon’s revenue growth, operating income or other metrics, consider the following personal factors:

• Risk Tolerance: How much money can you lose in the markets? And how does losing money in the markets make you respond emotionally? Investing in individual stocks is always risky, even when it's companies with solid market power like Amazon.
• Investment Goals: Your goals and timeline as an investor will inform your decision-making. A long-term mindset can better withstand drawdowns or economic turbulence. But if you have short-term goals, you may need more risk-averse investment rules.

Investing in individual stocks requires analyzing individual businesses. Amazon is far from the typical business - it's a multinational technology company and online e-commerce platform with many revenue streams and new projects. Amazon’s advertising business is especially impactful on the stock price and the company’s dive into artificial intelligence and machine learning could result in future catalysts. Utilize Benzinga’s news and analysis (plus the investor community) to stay on top of Amazon’s next moves.

Fees and Taxes 

Brokerage fees and commissions can chip away at investment returns if you aren’t careful with your activity. Most brokers have moved to a commission-free model on trades of stocks and exchange-traded funds (ETFs), but commissions usually still exist on derivatives like options or future contracts. Additionally, assets like mutual funds often come with load charges or short-term holding fees and most brokers also have various account maintenance, inactivity or data usage fees. Minimize your trading costs by being aware of fee structures and evaluating your activity.

Every investment must also figure in capital gains taxes. Capital gains are a tax on your profit when you sell an asset for more than you purchased. If you hold an asset for less than one year, your profit will be taxed at your ordinary income tax rate. If you hold the asset for over a year, you’ll get the more beneficial long-term capital gains rate (0%, 15%, or 20%, depending on your annual income). 

Taxes and investment costs always influence your strategy. Holding investments for extended periods gives you a more friendly tax situation but only some investors buy shares with long-term goals. Consulting with a financial advisor can provide more specific guidance based on your situation.

Final Thoughts on Buying AMZN Stock

Buying Amazon stock is a strategic investment decision that offers potential for long-term growth and profitability. By following the steps outlined above, you can confidently navigate the process of purchasing Amazon stock and start building a strong portfolio. With Amazon's continued innovation, diverse revenue streams and dominant market position, investing in this tech giant can be a valuable addition to any investment portfolio. Keep in mind the importance of thorough research, careful consideration of risk factors and staying informed about market trends to make the most of your Amazon stock investment.

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