How to buy Cheap Shares: Investing in expensive shares with $1
Buying stock does not need to cost a fortune. With many classical stockbrokers and cfd brokers you can now invest in stocks for as little as $1.
If you are interested in how to buy cheap shares, we will show you how.
Here we look at a couple of great ways you can get started buying stocks cheaply, even in some of the biggest companies, and most expensive stocks in the world. It has never been easier.
Here is a closer look at exactly how you can get started.
How can you buy stocks cheaply?
Below are the two key ways that you can start investing and buy stock cheaply and within your means as a trader, no matter your level of experience.
1. Invest in Fractional Stocks
Fractional stock investing has gained huge popularity recently with many big-name stock brokers now facilitating you to trade in fractions of a stock. This option may not be available with all brokers, but it is offered by many. This allows you to buy some of the biggest and most expensive company stocks in the world often for as little as $10 or less.
Of course, the profits and losses you incur here are proportional to how much of the stock you actually own. With that in mind, if you purchase a 1/10th fraction of stocks, then the profit or loss you earn on this stock will also reflect the same amount.
The table below shows some of the best brokers for investing in fractional stocks and the key features they offer:
| eToro | Trading 212 | Interactive Brokers | |
|---|---|---|---|
| Minimum Deposit | $200 | $1 | $2000 |
| Minimum Fractional Investment | $50 | $1 | $1 |
| Fractional Dividens | Yes | Yes | Yes |
| Link to the broker | Visit eToro (77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.) | Visit Trading 212 (83% of retail CFD accounts lose money) | Visit IB (74-89% of retail CFD accounts lose money) |
2. Invest in Stocks with Margin
Another way that you can buy stock cheaply is through investing with margin. Investing with this leverage allowed by your broker means you can put down a small amount of money. The broker then lends you the rest you need to complete the transaction.
With this kind of trade, your profits and losses are both counted as though you have invested the entire amount yourself. With this method though you may incur extra fees like spreads and overnight commissions that all brokers apply when you are trading CFDs including stock CFDs.
Most Forex brokers and CFD brokers allow their customers to invest in the Stock CFD market. The table below shows a few of the top brokers for investing in CFD Stocks and their main features:
| eToro | Pepperstone | Admiral Markets | |
|---|---|---|---|
| Minimum CFD Investment | $50 | %20 share value | 20% value share |
| Fees | 0.09% per share | $0.02 per share | $0,20 per share |
| Minimum Deposit | $200 | $0 | $100 |
| Link to the broker | Visit eToro (77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.) | Visit Pepperstone (74-89% of retail investor accounts lose money when trading CFDs) | Visit AM (76% of retail CFD accounts lose money) |
Is buying cheap stocks worth it?
Buying cheap stocks can be a great idea if you buy the right ones that eventually make you a profit. On the other side, there is a chance, just like with investing in anything, that you make a loss.
There is no certain way to determine this, but you can follow the best practice of doing thorough research on any investment, having good risk management strategies in place, and investing only within your budget which is something fractional share investing is great for.
How do beginners buy stocks?
As a beginner, there are many ways to get started. Fractional stocks are perfect since you can only lose the amount you have actually invested, while margin trading can be riskier especially for beginners.
The tendency is to choose cheap stocks to keep your risk level low and make it easier for you to trade with lower liquidity in these stocks. Thanks to fractional stocks though, you can also buy some of the biggest stocks while staying within your budget.
Can I buy a stock for $1?
Yes, it is certainly possible to buy a stock for $1. All you will need to do is make sure your broker permits fractional stock investing or investing on margin through CFDs and that the minimum deposit is low enough to facilitate your level.
The point to remember here is that with fractional stock, your profit or loss is also reflected in the same fractional amount, while trading on leverage this is not the case. Your P/L will reflect the amount as though you are invested in a full share.
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