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Google Stocks Trading: Trading Google Stocks In 2023
Google (also known as Alphabet) is a company that needs no introduction.
At the time of writing, Google processes a mind-boggling average of 8.5 billion internet searches every day.
For this reason, and the fact the company is branching out into technologies other than just internet search, Google has been a popular investment for traders.
In recent times, the company’s growth trend has faltered with a significant drop in its stock price after announcing underwhelming earning reports in 2022. The company blames a drop in revenue from advertisers due to the global economic crisis.
However, there are still trading opportunities for investors in Google stocks, as we’ll see in this guide.
A Brief History of Google (Alphabet)
From its humble beginnings in a Stanford University dorm, Google has grown at a phenomenal rate with a present value of around 1.3 trillion dollars.
How did it get there?
Google’s main line of business has been generating revenue through its internet search engine by offering advertising space.
The Google search engine is used multinationally and handles 90% of European internet searches, 91% of Asian searches, and 86.5% of US searches. Google’s worldwide market share of internet searches is 83.8% at the time of writing.
Google also owns YouTube which provides more than 5 billion video views per day to viewers around the world.
In 2015, Google went through a restructuring that saw the formation of a parent company called Alphabet. The reason for the restructuring was to allow Google to branch out into new technologies, not just internet search. Alphabet Inc is now valued at more than $1 trillion, making it one of the most highly valued companies in the world.
Google Stocks are traded on the NASDAQ stock exchange with the ticker sign GOOGL, GOOG. The company sits in the top 4 of all the major market indices, such as S&P 500, Dow Jones, and the most popular NASDAQ-100.
What Is Alphabet Stock (Google shares)?
Alphabet stock or Google shares are slightly more complicated than a simple listing under a single ticker. Google is just the trading name of the company. When you buy Google shares, you are actually buying the stock from Alphabet Inc. Alphabet stocks are listed under two different tickers – GOOGL and GOOG.
GOOGL STOCK
Buying stock listed as GOOGL gives you a share in the ownership of Alphabet Inc and voting rights on a one-share-one-vote basis. This share is also called Class A or Google Common Stock.
GOOG STOCK
GOOG shares are known as Class C shares, which give you a share in the ownership of the company, but without any voting rights whatsoever. The stocks give you less influence over the company’s direction and management, but they trade at a cheaper price than Class A shares.
CLASS B SHARES
Class B shares are an unlisted type of share that are solely owned by Google’s founders, Larry Page, Eric Schmidt, and Sergey Brin, as well as a few other directors. These shares carry 10 votes each, giving the founders priority decision-making power.
With these stock dynamics, the founders are able to exert greater control over the company and have more decision-making power than other board members and stockholders.
Initially, investors were a little uneasy about the stock structure, but the success of Google over the years has proven that it works. Many Investors are now willing to put their faith in the two founders and trust that the company is heading in the right direction.
How Well Does Google (GOOGL) Stock Perform?
Google went public back in 2004 and started at $85 per share, releasing 19 million shares in total.
As the company expanded, it took over other businesses such as YouTube which helped to boost the share price.
The GOOGL shares that were initially listed in 2004 went through a stock split in 2014. Holders of GOOGL received 2000 or more new shares for every 1000 existing ones.
The Google stock split unsettles some investors, causing pricing anomalies.
After a period of high market fluctuation, followed by rapid growth, Google stock hit an all-time high of $151 per share on November 18th, 2021.
Like most other big tech companies, over the years Google stock has shown a general growth trend, but is prone to periods of medium to high volatility, depending on circumstances in the global economy. In other words, during a recession, the stock may fluctuate or show more of a downward trend, compared to periods of economic growth.
At the time of writing (Dec 2022), Google shares are in a period of high turbulence due to the announcement of revenue losses caused by the global economic downturn.
How To Buy Google Stocks & Develop An Investment Strategy
In order to buy Google stocks, you need an investment account.
You can open an investment account through a brokerage or online investment platform.
Once you have opened an account, it is recommended that you decide upon a sound investment strategy and use a demo account (not real money) to test your Google stock trading strategy out.
There are two main ways to trade in Alphabet or Google stock.
Share dealing – Share dealing involves investing directly in Alphabet by purchasing stock and taking ownership of it.
Trading derivatives – Trading derivatives such as CFDs (contract for difference) or spread betting allows you to speculate on price movements of the GOOGL stock without ever taking direct ownership of shares.
If you decide to trade Google stock using CFDs, you agree to a contract with the broker that you will exchange the difference between the start price and closing price of the stock over the period of the trade.
Spread betting involves placing a bet of a particular value on each price point movement. In other words, you try to predict whether the market will rise or fall and if the market moves in your predicted direction, you’ll make money on each point movement. If it moves in the opposite direction, you’ll lose on each point.
When trading derivatives in Alphabet stock you can choose either of the following options:
Go long – buying stock or spread betting on an upward movement, which you would do if you predict that the market will rise.
Go short – selling stock or spread betting on a downward movement, which you would do if you predict that the market will fall.
Some brokers allow you leverage (borrowed funds) to trade derivatives, which allows you to trade with full market exposure without depositing large sums of money. However, trading with leverage will amplify gains and losses, so you should weigh up the potential risks and rewards before starting.
How To Analyze Google Stock (Alphabet share price)
Before you start trading Google stock, you should carry out either a fundamental analysis or technical analysis of the company, or preferably both.
- Fundamental Analysis – analysis of the overall profitability and financial outlook of a company, including studying financial reports, statements, leadership, and taking into account a variety of macroeconomic considerations. Important metrics to work out using the company’s financial reports and market data include:
- Earnings per share (EPS) – provides an indication of current profitability – divide the overall profit by number of outstanding Alphabet shares
- Return on equity (ROE) – provides a comparison of Alphabet’s assets against shareholder investments – divide the net income by stakeholder equity.
- Price-to-earnings (P/E)) – indicates the average you need to spend on shares to gain a $1 profit – divide the share price by EPS.
- Technical Analysis – analysis of charts and current and historic price movements. The reason to carry out a technical analysis of Google stock is to identify and forecast trends, then work out a strategy for entry and exit trading points. At TradeEU, we provide plenty of resources to help you perform a thorough technical analysis of Google stock.
Google (Alphabet) issues a report on the company’s earnings once per quarter. When the financial reports are released, the share price tends to become more volatile than usual. If you’re interested in trading Google stock, then it is recommended that you pay close attention to each quarterly report when it comes out. If the report shows that Google has increased its profits over the last quarter it may be a good time to go long. If profits are down, it may be a good time to go short.
If you are planning to day trade or short-term trade, then the price charts provide the best indication of current trends and whether you should potentially go long or go short on Google stock. Most day traders use support and resistance levels to determine whether it is the right time to buy or sell stock, setting a high peg which signals a potentially good time to buy and a low peg which signals a potentially good time to sell.
As with all trading activities, it is recommended that traders devise a risk management plan, particularly when investing in a highly volatile market. It’s true that every trader hopes to make a rewarding profit when trading, but in order to be successful they must calculate the risk-to-reward ratio and decide how much they are willing to lose.
Google Trading Hours
According to the regular trading session schedule, Google shares are traded on the NASDAQ stock exchange.
Market hours are from Monday to Friday 9:30 am to 4:00 pm (ET). Trading can also take place during pre and post market hours, i.e. 24 hours per day, but there is likely to be less liquidity (the ability to buy and sell shares quickly) during those times.
You can start trading Google stocks by signing up for an account at TradeEU and accessing both a wide array of useful tools and educational material that might assist you decide which trading strategy suits you the most.
Frequently Asked Questions
Does Google trade publicly?
Yes, Google is a publicly-traded company and has been since 2004. Google decided to go public almost two decades ago in 2004. Initially, Google was funded by venture capital firms and multiple independent investors. The company started with $85 per share for 19 million shares.
In 2015, Google reorganized the company and its holdings as a conglomerate and became Alphabet. Alphabet continues to trade under the Google ticker (GOOGL) and is commonly referred to as Google stock.
Is it worth buying Google shares?
The answer depends on a variety of factors. The Google share price has followed a remarkable growth trend since floating public and the company is valued at more than one trillion dollars, so it is a good candidate for long-term investment.
For short-term traders, especially day traders and derivative traders, Google stock can prove to be financially rewarding due to the short-term volatility of their share price.
Does Google pay a dividend?
Google has never paid out dividends to shareholders since becoming a publicly traded company. However, there are people in the investment community who are calling for Google to offer dividends due to the current bear market (at the time of writing). With $125 billion in cash and securities on the balance sheet, Google would be a strong candidate to pay out dividends.
Why are Google shares so expensive?
Google stock is made up of three classes. Alphabet Class A and Class C shares currently trade at around $100 per share, which makes them more expensive than other companies as they are highly valued. Class B shares are held by the founders and cannot be publicly traded.
What is the highest Google stock has been?
The highest that stock price of Google reached was $150 on November 18, 2021, with a 52-week high of $151 which is 53% above the current price.
References: Alphabet – Stock Price History | GOOGL | MacroTrends
List of Stock Markets | TradingHours.com
https://capital.com/amp/alphabet-google-share-price
https://admiralmarkets.com/instrument/alphabet-inc-google-class-a-goog
https://www.ig.com/uk/trading-strategies/how-to-buy-and-sell-google-shares-190628#information-banner-dismiss