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Reaching new high after high, PayPal Holdings, Inc. (NASDAQ: PYPL) has shown an upward momentum since the onset of the COVID-19 pandemic — and the company’s plans for 2021 show that it has no intention to slow growth. Our guide will help you learn more about PayPal and how you can buy PayPal stock.
How to Buy PayPal Stock Summary:
- Step 1: Pick a brokerage.
- Step 2: Decide how many shares you want.
- Step 3: Choose your order type.
- Step 4: Execute your trade.
How to Buy PayPal Holdings Inc. (PYPL) Stock
Investing doesn’t need to be complicated, expensive or only for people who can watch market news all day. Here’s how you can start your investing journey in just 4 simple steps.
- Pick a brokerage.
Before you can buy stocks and funds, you’ll usually need to open an account with a broker. A broker is a financial service company that provides retail investors with access to a trading platform they can use to buy and sell securities. When you decide to buy or sell a share of stock like PYPL, you’ll place an order through your broker’s platform, which your broker will then execute on your behalf.
Different brokers cater to different audiences, classes of traders, types of investments and more. Some of the factors you might want to consider when you decide which broker you might want to work with might include:
• Minimum account balances. Some brokers require minimum initial deposits to open an account — and if you don’t maintain your broker’s minimum balance, you might be subject to maintenance fees or other penalties. If you don’t have much money to invest right now, search for a broker that offers $0 minimums when opening an account.
• Commissions. Though it’s now possible to invest without paying anything in commission, you shouldn’t assume that all brokers have axed all of their fees. Be sure you understand all of the account maintenance fees and commissions your broker charges before you open an account. Note that commissions often vary between broker platforms and assets.
• Type of platform. If you’re a new investor or you’ve never traded stocks actively before, you may want to choose a broker that focuses on providing a simple and easily navigable platform. If you have experience trading or you’re already familiar with how to buy stocks, we recommend working with a broker that offers extended operating hours and a wider selection of platform tools.
• Access to additional markets. Virtually every broker offering access to customers in the United States will allow you to buy PayPal stock. However, some brokers have taken market access a step further, allowing you to buy and sell options, cryptocurrencies, futures contracts and other types of securities with a single account. If access to these markets are important to you, you may want to consider searching for a broker that provides you with a single place to buy and sell all the investments you’re interested in.
- Decide how many shares you want.
Next, you’ll need to decide how many shares of PayPal stock you want to buy. Take a look at the current market price of PYPL and monitor how it’s changing over time. Remember that if you can’t afford a full share of PYPL, your broker will likely allow you to invest in fractional shares.
- Choose your order type.
After you decide how many shares of stock you want to buy, you need to decide which type of order you want to use. Your order type tells your broker when you’d like your order to be executed and the price you’re willing to pay for each share of stock you buy. Some of the most common types of orders your broker might provide can include:
• Market buy. A market buy tells your broker that you want to buy a set number of shares of stock at the current market rate. The price you’ll pay per share may vary above or below the price you see on your trading platform as the market fluctuates.
• Limit buy. A limit buy tells your broker that you want to buy a set number of shares of stock at or below a “limit” price that you choose. For example, if you set a limit order to buy PYPL at a price of $250, your broker would only execute the order if it was possible to invest in PYPL at this price or below.
• Stop order. A stop order tells your broker that you want to buy a set number of shares of stock only if the price of the stock rises above a certain level. For example, if PYPL is trading at a price of $250 a share, you might set a stop order with a stop price of $270. If the price of PYPL reaches $270, your order will be converted to a market order and executed.
- Execute your trade.
Double-check that the details on your order are correct, then submit your order to your broker to execute. If the broker is able to execute your order according to your instructions, you’ll see the shares of stock in your investment portfolio. If the broker cannot execute your order, it may expire at the end of the trading day.
Best Online Brokers
Not sure where to start your search for your first brokerage account? Consider a few of the best brokers we work with below.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.
- Intermediate to Advanced traders
- High-volume traders
- Momentum traders
- Short sellers
- Unrivaled access to short inventory
- Flexible order routing for improved executions
- Discounts for active traders
- Advanced platform with fast executions
- Reliable customer service
- Not designed for beginner or low-volume traders
PayPal Holdings Inc. Stock History
PayPal Holdings Inc. is an online payment processing company best known for providing a nearly ubiquitous online money transfer system for retail clients. The majority of PayPal’s business comes from processing online transactions, as it charges a small fee on merchants when they authorize payments through PayPal’s payment processing system.
PayPal had its initial public offering (IPO) in February 2002. Later that same year, the company was acquired by online auction giant eBay with a total company valuation of $1.5 billion. The company has maintained a steady increase in share price since the onset of the COVID-19 pandemic with share prices doubling in value since March 2020.
As e-commerce came to the forefront of shopping trends in 2020 due to the COVID-19 pandemic, PayPal’s shares have more than doubled in value.
Pros to Buying PayPal Holdings Inc. Stock
2020 has been an explosive year of growth for PayPal — and according to future plans for 2021 and beyond, executives don’t plan to slow down the huge number of upcoming projects that have in the works. During a 4th quarter earnings call, CEO Dan Schulman proudly announced that PayPal had released “more products and services in 2020 than in any previous year, and we will step up that pace in 2021.” Some future endeavors include easier cryptocurrency investment setups, spending with cryptocurrencies, enhanced bill pay services and shopping extension tools to help customers find better deals when buying products online.
As sentiment for PayPal remains high, it’s possible that these new developments will continue to drive the price of the stock higher in 2021 and beyond. In particular, the payment company’s focus on cryptocurrency development coincides perfectly with renewed investor interest in the digital currency market. Schulman believes that these new innovations are crucial to staying active in the market, and that “[e]ach new service [PayPal launches] drives incremental increases in our overall consumer lifetime value.”
Cons to Buying PayPal Holdings Inc. Stock
It’s impossible to talk about PayPal’s new advancements for 2021 without mentioning that the company is far behind competitors in each of its areas of interest. Consumer-friendly apps like Square have hosted Bitcoin and investing services since 2017. Square’s Cash App investing boasts many of the same no-commission features and simple order placement tools as brokers like Robinhood but combine the service with payment services that PayPal has long relied on.
Other free apps for budgeting and shopping services (like Intuit’s Mint and the Honey browser extension) have already made a mark on the financial zeitgeist. Though PayPal holds a considerably larger share of the market than any of its competitors, it may face challenges convincing users to abandon their current apps for PayPal’s suite of services.
Invest in PayPal
Though PayPal has a long history of profitable returns for investors, it’s important to remember that the share price of any stock is never guaranteed to increase. Use PayPal to supplement a fully diversified portfolio, and never use a single stock as a replacement for retirement savings or other long-term investments.