How To Buy SNAP Stock: Buying stock can be a major opportunity. You spot the next big trend, invest your money, and at some point in the future, you cash in, making a small fortune – or at least, that’s how it plays out in your head.
You imagine that your investment is life-changing. Unfortunately, the pendulum can also swing against you. Protect yourself by doing research on any stock you consider buying.
SNAP Up This Investment Opportunity
SNAP (SNAP) is a good example. This is the company behind Snapchat. Even if you don’t have an account, you’ve probably heard about the mobile service that allows users to record themselves in a video or still image and send that message to a friend. (Here is how it works, if you are curious)
Messages self-destruct after reading, so the pics and the filters that alter them tend to be extra silly. However, this fun trend does more than offer a way to connect with friends and celebrities in a very casual way. It is also a major alternative to other messaging services.
Teens in particular have started snapping instead of texting. They often send a silly photo of themselves as a way to stay in touch and connected – no words required.
Snapchat is a big deal, but is it “big enough” to warrant your investment? The right answer to that question depends on you as an investor, but there are things you should know about the company before you decide.
First, let’s look at the positives.
Is SNAP Stock a Buy ?
Snapchat is more than an app. The company collects data on its users and sells ads. The difference between SNAP and a social media company like Facebook is that Facebook posts actual ads on its platform and it collects data to make sure the ads it displays to users are uniquely relevant.
SNAP is different.
It helps companies make Sponsored Lens so that users can filter their images in a way that meshes with the brand, movie, or product being promoted. Users get to use that filter for free and everyone wins.
Companies can also pay to create a Snap Ad. This is a short-form video that users can watch within the app.
Sticking with the theme of Snapchat, these are rarely commercials and more like snippets of funny things or valuable info. In other words, SNAP encourages advertisers to offer users more value than traditional ads would allow.
Snapchat uses the info it collects from users to make sure the right advertisers meet the right users. The company also measures effectiveness, so it becomes a two-way street towards improving ad effectiveness, both in current campaigns and in the future.
Snapchat is also different because it offers a certain authenticity. While its images may be filtered, the company offers users a variety of information that cannot be faked, like heat maps of where people are taking snaps, the elevation of where a user is currently standing, the time of day, and the location of the snap.
What to Know Before Buying SNAP
Snapchat obviously has its challenges. Adoption is very high amongst younger people, but its services are really only as valuable as advertisers deem them to be. They need to see a return on investment, or they may return to traditional advertising methods.
After all, it is not like Snapchat is the only messaging option on the table. Facebook has Instagram as well as WhatsApp.
There is also Twitter and whatever app is popular this week. Some of those rivals are massive companies with more resources and more users than SNAP. They will always be a challenge.
At the same time, SNAP’s biggest demographic could decide to use a different service at the drop of a hat. They don’t have issues with adoption. They want to be where their friends are and where they perceive their info/image to be safe.
SNAP does offer users several options for protecting their privacy, but it is always a concern in social media and messaging.
How To Trade SNAP In A Brokerage Account
Once you decide whether you want to invest in SNAP (or any other stock), your next step is to actually purchase the shares.
For that, you will need a brokerage account at tastyworks or some other top brokerage firm.
While you can buy stock through a stockbroker – remember Wall Street – most people open an online account because it allows them to easily place their own orders and the cost is generally lower.
Opening a brokerage account is easy. If you use a national financial institution for your banking needs, it may even offer brokerage services that can connect directly to your checking account. If not, or if you don’t mind going somewhere else, consider an online brokerage, like TD Ameritrade or Schwab.
Online brokerages all offer similar services. Some just give you a little more – like better research or 24/7 support – while others are more bare bones, but they tend to have fewer transaction costs. For example, tastyworks focuses on stocks, options, and futures.
Evaluate how often you want to trade, look at the commission you would have to pay on each trade, consider the minimum balance requirement, and do the math.
Offering in-depth research may sound great, but if you already have another system in place, like leveraging the tools on Financhill, you may never use the analyst reports your broker provides – so why pay more?
That said, you may love the tools one brokerage offers over another. Choose what works for you, just remember to add up the costs involved.
Place a Buy SNAP Stock Order
If you want to buy SNAP stock, you will go to your online broker and place a stock order. You can just hit the “buy” button. That will place a market order for the stock. This means that you agree to buy the stock at whatever the current price is.
Because the transaction is not immediate, the price may shift between when you hit the button and the transaction is processed, but the price differences are generally negligible, especially if the company is very large.
You can also place a limit order. This means that your transaction will only be processed if you can buy the stock at a certain price that you set. There are other types of orders too and there is always the issue of options – don’t panic.
Take your time and learn about your choices. If it is easier for you to buy a single share at a time so you can see these actions in practice, do that – and always do your research.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.