Apple Stock Trading: How to Trade Apple Stocks CFDs

Apple Inc. (AAPL) is a globally recognised technology company known for its innovative products and services. With the company’s growth and brand presence, trading Apple stock may offer an opportunity to potentially benefit from its market performance.

In this guide, we’ll explore reasons for trading Apple stock, the historical context of its market performance, and the key factors that impact its price.

We’ll also examine various AAPL trading strategies and methods, from traditional share purchasing to financial derivatives like CFDs. By the end of this guide, you'll have a clearer understanding of how to approach trading AAPL and be equipped with practical insights and strategies to inform your trading decisions.

Why Trade Apple Stock

Apple’s growth, inventive products, and strong brand recognition make it an attractive option for many traders. Although past performance doesn’t predict future success, the company’s stock price reflects its historical market dominance and ongoing potential for growth, making it a dynamic and exciting stock to trade. Moreover, Apple’s past success has brought brand recognition, desirable products like the iPhone and iPad, and a loyal consumer base.

However, this growth has also set high expectations from the market, which anticipates new and innovative products regularly and often assumes the company will surpass revenue and earnings predictions. If Apple cannot continue delivering a steady stream of groundbreaking products, its stock could decline, even though the company has significant cash on hand.

The History of Apple Stock

Apple Inc., co-founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976, transformed the tech industry with its groundbreaking products and has become a global leader in consumer electronics, software, and services. The company went public on December 12, 1980, with an initial stock price of $22 per share, generating more capital than any initial public offering (IPO) since Ford Motor Company (F) in 1956.

Over the years, Apple has consistently expanded its market presence across various global regions, including the Americas, Eurozone, Greater China, Japan, and the rest of the Asia Pacific. This has led to its current status as one of the world’s most valuable companies, with a net worth of 3176.45 billion US dollars as of June 2024.

The journey of Apple's stock, traded under the ticker symbol AAPL on the NASDAQ, has been marked by dramatic ups and downs, reflecting its corporate and product evolution.

Apple stocks’ all-time low closing price was $0.04 on July 8, 1982, during a period of significant challenges for the company.

In 1985, despite early successes, Steve Jobs was ousted from Apple Inc. It wasn’t until his return in 1997, along with a strategic turnaround plan and a $150 million investment from Microsoft (MSFT), that Apple was rescued from the brink of bankruptcy.

This period of innovation and growth saw the launch of landmark products like the iPod, iPhone, and iPad, collectively driving a more than threefold increase in Apple's stock price by the end of 2004.

AAPL is now a cornerstone of major market indices such as the NASDAQ 100, S&P 100, S&P 500, and Dow Jones Industrial Average (DJIA). The closing price of Apple stock on June 2, 2024, was $196.00. This high market valuation reflects Apple's continued influence in the tech industry and its significant impact on broader financial markets.

What Influences the Price of AAPL

Several factors can influence the price of Apple stock, including product launches, financial performance disclosures, and broader market trends. These factors are intricately linked with worldwide economic health and the tech sector’s competitive landscape, creating a complex web that traders must navigate.

• Product Launches: Apple’s ability to deliver innovative products with user-friendly interfaces has always been a considerable driver of its stock. For instance, Apple’s stock price rose 7% to a record high above $200 per share after its 2024 Worldwide Developers Conference (WWDC) from June 10-14, where the company unveiled its new generative artificial intelligence (AI) capabilities.
• Earnings Reports: Earnings estimates and revisions influence the stock’s performance. When earnings reports estimates for a company go up, the fair value for its stock tends to go up as well, and vice versa.
• Broader Market Trends: Global economic indicators, such as interest rates, inflation, and geopolitical events, may sway trader sentiment toward Apple’s stock. Trends in the technology sector and competitive dynamics also contribute to shaping the stock price trajectory.
• Sales of Key Products: iPhone sales are one of the company’s largest revenue generators. For example, as of the first quarter of 2024, iPhone’s annual revenue generated 69.7 billion US dollars.
• Services: Over the years, services have constituted an increasingly significant portion of Apple’s revenue. In the second quarter of Apple’s 2024 fiscal year, services, including the App Store, Apple Pay, and Apple TV+, accounted for over 26% of the company’s total revenue. In the second quarter of 2024, Apple generated 23.87 billion US dollars in services revenue.
• Market Sentiment: A market sentiment can be influenced by various factors, including the overall health of the economy, attitudes toward the tech industry, and perceptions of Apple’s future growth.

All in all, trading Apple stock requires a comprehensive understanding of the numerous factors that can influence its price. By monitoring these elements, traders can make more informed decisions about when to buy or sell.

Ways to Trade Apple Stock

Several methods are available to trade Apple stock, each offering different benefits and risks. The best choice depends on your individual trading goals and risk tolerance.

Apple Shares

One of the most straightforward ways to trade AAPL is by buying shares, also referred to as equity or stocks. These shares represent ownership in the company and are listed on exchanges like NASDAQ. The price of these shares reflects the total number of shares Apple has issued and is usually quoted in US dollars. By purchasing shares, traders can gain direct exposure to Apple’s financial performance and market fluctuations.

Apple ETFs

Another popular method to trade Apple stock is through exchange-traded funds (ETFs), which bundle Apple with other companies to track specific market indices or sectors. For instance, the Technology Select Sector SPDR (XLK) ETF includes significant holdings in Apple, providing exposure to the technology sector with just one transaction.

ETFs offer the flexibility of being traded throughout the day like individual stocks, though it's important to be mindful of transaction fees and expense ratios.

Apple Options

Apple stock options allow traders to speculate on future price movements without owning the shares directly.

Plus500 offers two types of options CFDs: Call options and Put options, and you can open Buy or Sell positions on both types. With Call and Put options, traders can take positions on whether they believe Apple’s stock price will rise or fall by a specific date.

Options trading involves a high level of risk and complexity, including the potential for significant losses if the market moves unfavourably.

Apple Share CFDs

For those interested in speculating on price movements without actually owning shares, stock contracts for difference (CFDs) provide an alternative. Trading CFDs on AAPL allows traders to leverage their positions, potentially increasing profits with a smaller initial outlay but also the risk of amplifying potential losses.

One difference between stock trading and CFDs is that, unlike traditional stock trading, CFDs allow traders to speculate on upward and downward price movements, adding more flexibility but also increasing risk to trading strategies.

How to Trade AAPL CFDs

Trading AAPL CFDs involves speculating on the price movements of Apple’s stock without owning the underlying asset. The mechanism of CFDs is such that traders can speculate on the price variances between the opening and closing of the contract.

Traders can engage in AAPL CFDs trading by keeping an eye on stock prices and utilising stock charts to analyse trends prior to executing Buy or Sell orders. This market enables traders to transact CFDs based on the prices of shares listed on the stock exchange, allowing them to participate in fluctuations without owning the underlying share.

If a trader anticipates an AAPL price increase, they can 'go long' and buy a CFD. Conversely, predicting a stock price decrease will prompt a 'go short' strategy, where a trader looks to sell a CFD.

The versatility of taking long or short positions in CFD trading enables traders to speculate on upward and downward movements within the market, which may be beneficial during times of market volatility. However, traders should be aware that market volatility can also increase risk and that volatile market conditions are not suitable for all.

Moreover, one of the key features of AAPL CFD trading is the ability to open positions with only a fraction of the total asset value as a margin deposit, known as trading using leverage. While leverage can potentially magnify profits, it’s important to note that it can also increase the possibility of substantial losses.

When a CFD position is closed, the trader and the provider settle by exchanging the price difference between the position's entry and exit points.

Apple Stock Trading Strategies

Staying apprised of market developments is essential for successfully trading AAPL. Using a trading strategy that combines fundamental analysis and technical analysis can give you a comprehensive view of the market.

Fundamental analysis considers economic, political, social, and global factors to assess potential stock price movements, while technical analysis focuses on price movements and patterns to predict future trends.

Depending on your trading style, you might employ different strategies when trading Apple stock. Each strategy requires a different approach and understanding of the market. Here are a few strategies for trading AAPL:

Day Trading

Day trading is a short-term strategy where financial assets are bought and sold within the same trading day with the goal of capitalising on small, rapid price movements. Those who adopt this approach often execute many transactions within a single day.

A defining trait of dedicated day traders is that they square off all their positions before the market closes, ensuring they don’t hold any financial derivatives overnight and starting each new trading day afresh.

While day trading presents potential opportunities for returns, it’s also accompanied by significant risks and requires a thorough understanding of market dynamics and the ability to make quick, well-informed decisions.

Swing Trading

Swing trading is similar to day trading but over a slightly longer period of a few days or weeks rather than a single day. Swing traders try to capitalise on trends in a specific stock, a certain sector, or the entire stock market over a short- to medium-length term.

Position Trading

Position trading is a longer-term strategy in which traders hold positions for weeks and/or months. This method is based on the expectation that a stock's price will move in a certain direction over time.

*Please ensure you are aware of the fees associated with trading AAPL CFDs

AAPL Trading Hours

Since Apple stock is traded on the Nasdaq exchange, it can be bought or sold on weekdays between 9:30 a.m. and 4:00 p.m. Eastern Time (ET).

However, AAPL trading is not confined to standard market hours. The pre-market session begins at 4:00 a.m. and concludes at 9:30 a.m. ET. Additionally, the after-hours market offers another window for trading from 4:00 p.m. to 8:00 p.m. ET.

If you place an order outside of the hours your brokerage allows you to trade, it will be processed once trading resumes.

Note that trading hours on the Plus500 platform may differ and can be found in the instrument details.

Risk Management Tools for Trading Apple Stock CFDs

Effective risk management is crucial when trading AAPL CFDs. With platforms like Plus500, traders can utilise various tools to manage potential losses and protect gains.

Close at Profit [Stop Limit] and Close at Loss [Stop Loss] orders are two of the most common risk management tools traders use. These allow you to set predefined rates at which positions will automatically close, either to lock in profits or minimise losses.

However, while these features are offered free of charge, they don’t guarantee the position will close at the exact price specified due to potential slippage. This can sometimes result in a lower or higher closing price than requested, particularly during periods of high market volatility.

In comparison, adding a Guaranteed Stop order to your trading position limits your potential loss. Even if the price of AAPL moves significantly against you, your position will automatically be closed at the specified price with no risk of slippage. However, it’s important to note that a Guaranteed Stop does incur a fee upon activation.

Conclusion: Apple Stock Trading

Due to its market prominence and consistent performance, trading AAPL can offer a range of opportunities. By understanding the factors that drive its stock price and employing various trading strategies, from buying shares to using options and CFDs, traders can effectively navigate the complexities of the market.

As you engage with Apple stock, staying informed about market trends, financial reports, and product launches will be crucial for making well-informed decisions. With careful analysis and strategic planning, you can leverage the potential of trading Apple stock to enhance your trading outcomes.

If Apple CFD trading piques your interest, you can start trading AAPL CFDs with Plus500.

AAPL Trading FAQs

What factors affect the price of Apple stock?

Various factors, including product launches, earnings reports, global economic trends, and market sentiment, influence the price of Apple stock. Apple's ability to introduce innovative products and its financial performance play significant roles in shaping its stock price.

What are some popular methods for trading Apple stock (AAPL)?

Common methods for trading AAPL include buying shares directly, trading through exchange-traded funds (ETFs), and using more complex instruments like options and contracts for difference (CFDs). Each method offers different levels of exposure and risk, catering to various trading strategies and goals.

What are some effective strategies for trading AAPL?

Effective strategies for trading Apple stock include day, swing, and position trading. Each requires a different approach to market analysis and risk management. Combining fundamental and technical analysis can provide a comprehensive market view and help traders make informed decisions.