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In the time since Virgin Galactic went public as the first publicly traded space tourism company, its stock has made some pretty exciting moves.
The company develops commercial spacecraft for both scientific missions and space tourism in an intensifying race to become the first company to offer space travel.
Ready to jump on board space tourism? Virgin Galactic could be a great pick. Read on to learn how to buy Virgin Galactic now.
How to Buy Virgin Galactic (SPCE) Stock
Whether you see Virgin Galactic as your prime opportunity to invest in the exciting future of space travel or you just see its recent price explosion as an opportunity to turn a quick profit, the first thing you need to do is learn the basics of buying stock.
- Pick a Brokerage
When you’re on the hunt for a brokerage, you must consider what kind of fees it charges, which kind of equities it has access to (such as stocks, ETFs, cryptocurrencies, options, etc.), and the educational and research features it offers its investors.
- Decide How Many Shares You Want
The number of shares you want comes down to personal preference. If you’re looking for a short-term trade opportunity, focus on the technical analysis of the stock’s price history. If you view SPCE as a long-term growth opportunity, focus on a fundamental analysis of the potential future payoff of the company’s current investments in space travel.
- Choose Your Order Type
After you’ve done your research and know how many shares you want, it’s time to place your order. Check out a few order types below.
The bid price is the price you’re offering for the shares. Typically, this will be whatever the current market price is but you can also set custom bid prices.
The ask price is the price a current shareholder is offering to sell shares. As with bid price, it’s most often the current market price but you can also set your own custom price.
The bid-ask spread is the difference between what you are willing to pay and what a shareholder is willing to sell that stock for. Let’s say you place an order for Virgin Galactic when the price is $47.23 per share. Your order might not fill until later in the day, when the price has gone up to $49.58 per share. In this case, the bid-ask spread is $2.35 per share.
A market order is a simple order to buy or sell the stock at whatever the current price is at the time of execution. These are the easiest orders to fill because the broker can execute the trade as soon as enough shares are available to fill your order.
Let’s say you’re looking for stocks under $5 and you place your order when the price is $4.50 per share. With these smaller, more volatile stocks, the price might inflate to $8 or higher before your order fills. Depending on what kind of returns you expect on this trade, that could seriously eat into your profit.
To minimize the risk of paying (or losing) more than you’re comfortable with, you can place a limit order. With a limit order, you place a maximum bid (if you’re buying) or a minimum ask (if you’re selling). This helps minimize the risk of paying more than you’re willing to pay or selling for less than you wanted to sell. If your maximum bid is lower than what anybody is willing to pay, you run the risk of never getting to buy any shares at all.
Where a limit order says that you’re only willing to buy a stock at or below a certain price, a stop-loss order triggers a market order once certain conditions are met. Let’s say you’re looking for stocks under $20 per share and you place an order when the price is $19.
If you’re not willing to risk losing more than 10% of your investment, you’d add a $17 stop-loss to your order. This will automatically place a sell order on the market when the price falls below $17.
The risk of a stop-loss is that it will trigger a sell order when the price hits $17 but if the price plummets fast, the order might not fill until it’s even lower. In this case, you might prefer to hold onto the shares and wait for a better sell opportunity later.
With a stop-limit order, you can prevent your shares from selling for anything less than what you’re willing to sell for.
Let’s say you’re buying stocks under $10. You put a stop-loss in for $8 per share and add a stop-limit of $7. The stock price drops to $8 and a sell order is automatically placed. If the price keeps dropping and falls below $7 before the order is filled, the stop-limit will automatically cancel that sell order.
- Execute Your Trade
Once you’ve chosen the number of shares and the order type, all that’s left is placing the order. At this point, the trade order is in the market and you’re just waiting for confirmation from your broker when the trade has executed.
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Virgin Galactic Stock History
Virgin Galactic had its initial public offering (IPO) on October 28, 2019. Since then, it’s enjoyed a volatile but mostly positive upward trend, going from about $10 per share at its IPO and now hovering just under $50 per share. The stock spent time in the high reaches around $55 per share, dipped down, rose again in July of 2021, but faltered afterward. Since, Virgin Galactic stock has remained at a low around $6 per share.
Why? Virgin Galactic has had to delay proper flight operations on numerous occasions. There has been a fatal accident involving SpaceShipTwo, piloted by two test pilots—the co-pilot was killed and the pilot was severely injured when the vessel broke up mid-flight. Additionally, the company has always been “behind the 8 ball” in terms of timing because the technology is extremely advanced, they need the safest operating conditions and they have built numerous test vehicles along with their partners at Scaled Composites.
Pros to Buying Virgin Galactic Stock
Like its competitors, Virgin Galactic continues to report losses because it heavily invests in the research and development of commercial spacecraft, but the payoff is still a few years away. While the current lack of revenue could be read as negative, it’s actually a boon to potential investors.
When Virgin starts selling private trips to space, the per-share price of its stock will likely skyrocket. Getting in now while the company reports losses and the price is still in the double digits could be a prime opportunity.
Some reasons to be optimistic about the company’s future:
- Unlike its major competitors, SpaceX and Blue Origin, Virgin Galactic is owned by a company with extensive experience in aviation, so it had a head start in assembling a team of top-level aerospace experts for research and development.
- Virgin has announced partnerships with Boeing, Under Armour and other companies that have the potential to strengthen its position in the market.
- Using spacecraft for hypersonic intercontinental travel can give Virgin access to a broader customer base than just the few who would be able to afford space travel.
Cons to Buying Virgin Galactic Stock
Virgin Galactic founder Richard Branson has made repeated claims that the company will be making its maiden voyage to space “this year” for the last 10 years or so.
To be fair, no other competitor is much further along, either. However, this lack of progress means that the race to space is still neck and neck. As an investor, that means it may be too early to tell which company will come out ahead. In short, the new space race is more like a crawl.
There are also concerns that part of this price surge we’re witnessing is due to the short-squeeze rally. If that’s the case, the current price is likely to be unstable and we’ll probably soon see a drop back down to the $20 range, where it’s been hovering the past year or so. If you want to add SPCE to your portfolio for the long term, you might be better off waiting for the stock to drop back down to $20 or $30 so you can get in at a cheaper price.
Make Virgin Galactic Your Next Growth Stock
Virgin Galactic could be your opportunity if you want to get on on the recent squeeze rally, but remember, timing is key on shorter-term swing trades.
Even if Virgin loses the race to be first in space, the company’s decades of research and development ensure that it won’t be far behind and will likely continue to be a strong industry player.
Frequently Asked Questions
Questions & Answers
No, Virgin Galactic is not currently hosting space flights. The firm is still in the testing phase of operation, but they plan to offer flights in 2023.
It appears that space flights will be reserved for a chosen few (with prices initially looking to sit at $450,000), but Virgin and CEO Richard Branson hope to make space flight available to the masses.