How to buy Netflix shares in South Africa?

If you’ve ever binge-watched Stranger Things or are currently watching Squid Game, you must have heard of Netflix. The streaming service provider has become an integral part of our lives, consuming most of our spare time.

Netflix seems like a viable option to invest in, but how can you buy Netflix shares from South Africa?

You’ve come to the right place if you’re searching for an answer. In this guide, we’ll break down how you can invest in Netflix stocks from South Africa without breaking a sweat.

An overview of Netflix

Before we dig deeper, let’s tell you a bit about the company you’re interested in.

Netflix Inc., based in California, is a streaming service and a production company. Marc Randolph and Reed Hastings established it in California in 1997.

The company’s main business is subscription-based streaming, including a library of television shows, films, and original content.

Netflix has grown steadily over time, reaching 208 million customers in April 2021. Except for China, North Korea, and Syria, it is available worldwide.

The company’s first operation was DVD sales and rental via mail, but it stopped it within the first year of its inception. In 2007, it extended its company by introducing streaming media. People were still paying for regular cable television at the time, and streaming media was still relatively new.

Netflix began offering streaming services in Canada in 2010. After that, it started its operations in Latin America and the Caribbean in 2011. House of Cards was its first venture into the production sector in 2013.

Netflix surpassed Disney as the most valuable media business by market capitalization in 2020, and it was recognized as the world’s eighth most trusted brand in 2021.

Netflix is recognized for its binge-watching approach, in which users may watch a whole series without ads or pauses in one sitting.

During the pandemic, Netflix subscriptions sky-rocketed because many people were staying at home. Many consumers perceive the service as a substitute for cable, preferring to eliminate the latter from their monthly budget, favouring a streaming selection including Netflix and others.

Fact: Netflix is part of an elite stock group called the FAANG (Facebook, Amazon, Apple, Netflix, and Google Alphabet).

If you want to acquire the company’s stock, you’ll need to find a suitable broker that can let you buy international stocks from South Africa. Netflix has a ticker symbol of NFLX, so remember that ticker symbol if you want to buy.

Now that you know about Netflix let’s move towards the juicy part of the guide.

What’s stock anyway?

For those of you who don’t know, a stock is a fraction of a corporation. Simply owning one share qualifies you as an owner and allows you to claim a portion of the company’s assets and revenues.

Stocks are often the cornerstone of most portfolios, and they have traditionally outperformed other investing alternatives over time. There are several methods to invest in the stock market, but two basic approaches are; buy and hold and short-term speculation.

Can you buy US shares from South Africa?

Many South Africans wonder if they may buy US equities while not being citizens of the United States. Although the US constitution regulates the country’s stock and bond market, you don’t need to be a US citizen to trade any individual US stocks.

In other words, as a South African citizen, you may invest in US stocks. Furthermore, no explicit restrictions prohibit South Africans (or other non-US nationals) from investing in the various stock exchanges in the United States.

Steps you need to follow to buy Netflix shares in South Africa

To buy NFLX shares from South Africa, you need to follow a few steps.

1. Find a reputable broker

If you are interested in stock trading in South Africa, the first step you need to take is to find a suitable online broker. This is one of the most significant steps when trading stocks. After all, you’ll invest your real money with the broker, so it’s key to open an account with a trustworthy broker.

If you are thinking, “how am I going to find out the top broker to trade Netflix shares”? Then, let’s present you with a list of some of the best stock brokers in South Africa through which you can invest in Netflix.

a. Interactive Brokers

As the best online trading platform in South Africa, we recommend Interactive Brokers. IB is one of the world’s major brokerage houses. It was established in 1978 in New York City and now has over 24 offices in 14 countries.

IB has a lot to offer for both novice and expert traders all around the world. Because of their minimal commissions and costs, they stand out as one of the finest brokers for active day traders. Moreover, the company is regulated by several top-tier nations.

The Securities and Exchange Commission (SEC) of the United States, the Financial Conduct Authority (FCA) of the United Kingdom, and many more are among them.

Stocks, options, ETFs, FX, futures, cryptocurrencies, gold, mutual funds, bonds, and hedge funds are all available to invest in and trade. When it comes to the tradeable products they provide, IB is considered a top-tier broker.

IB’s lite account users can trade US-listed stocks and ETFs without paying a fee, whereas IB’s pro account users pay a set rate to trade US-listed and non-US-listed stocks.

So, if you want to buy Netflix shares without any hassle, IB is your best bet.

Pros

• Great education and market research tools
• Plenty of trading platforms to choose from
• Multiple tradeable products
• Highly regulated
• Quick order execution

Cons

• Higher minimum deposit

b. eToro

eToro is a multi-asset brokerage firm that specializes in social and copy trading. The major attraction of its trading platform is social copy trading. It allows non-trading users to mimic the trades of successful investors.

eToro is a secure platform that is regulated by the highest financial authorities. Tier-1 financial regulators supervise eToro. The UK’s FCA, Cyprus’s CySEC, the US’s FinCEN (financial crimes enforcement network), and Australia’s ASIC.

Stocks, fiat currencies, commodities, exchange-traded funds, and 15 cryptocurrencies are among the financial instruments offered by the brokerage business.

Trading fees on eToro are among the lowest in the business. In addition, they don’t charge commissions on equities listed in the United States.

Pros

• Allows copy trading
• Beginner-friendly platform
• Multiple tradeable products
• No fee on US stocks
• Great customer service

Cons

• High non-trading fees

c. Plus500

Plus500 is a worldwide fintech business based in Israel that offers CFD online trading services. It was formed in 2008.

Plus500 is a legitimate company that is governed by the highest financial authorities. Top-tier financial regulators supervise Plus500. Singapore’s Monetary Authority (MAS), the UK’s Financial Conduct Authority, and Australia’s Securities and Investment Commission.

The brokerage firm offers over 1800 stocks, including Netflix. Besides stocks, you can trade forex, cryptocurrencies, commodities, and ETFs.

In comparison to some of its competitors, Plus500 boasts minimal trading expenses. For example, they don’t charge a monthly fee for the first five withdrawals, a bonus for traders with little funds. In addition, there are no commission fees or trading costs.

Pros

• Commission-free trading
• Plenty of tradeable products
• Quicker order execution

Cons

• Limited education and research tools

d. AvaTrade

AvaTrade is located in Dublin, Ireland, and was formed in 2006.

Several tier-1 entities regulate Avatrade. One is the Central Bank of Ireland, while another is the Australian Securities and Investments Commission.

Commodities, bonds, cryptocurrencies, stocks, and stock indexes are among the financial instruments available to traders.

Avatrade’s fixed spreads set it apart from other online trading platforms. These are the bare minimum losses you should expect when buying and selling stocks.

Some traders struggle to keep their losses to a minimum. This is not an issue with Avatrade because there are no margin restrictions. With its risk management capabilities, you will still maximize your earnings and limit your losses.

Pros

• Allows copy trading
• Hassle-free account opening process
• Multiple research and education tools
• Risk-management features

Cons

• High non-trading fee

e. Firstrade

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) supervise Firstrade, a discount stock broker based in the United States. The firm was established in 1985 as First Flushing Securities.

For stock and options trading, Firstrade has implemented a $0 commission policy.

Apart from minimal fees, Firstrade distinguishes a one-of-a-kind securities lending service for investors who want to earn extra money by lending their stocks to other financial institutions. The account holder’s ability to sell their stock at any time is unrestricted under the securities lending program.

Pros

• Commission-free trading
• Beginner-friendly trading platforms
• Allows securities lending program

Cons

• Only US-based tradeable products

After finding a reputable broker, it’s time to move towards the next step; open an account and buy Netflix

2. Opening an account and buying Netflix

After selecting a broker, you need to open an account with them. Thankfully, the account opening isn’t daunting these days, so you can open it in 10 to 15 minutes.

Most brokers have the same account opening process, which includes:

• Registering with the broker.
• Uploading ID verification documents.
• Depositing funds. You can deposit via credit/debit cards, PayPal, Skrill, wire transfers, and other payment methods.

After these steps, you are good to go.

So, how can you buy Netflix shares on the broker’s platform?

Well, this isn’t like solving complex algebraic expressions. When you sign up, you’ll have a dashboard. You can download trading platforms like MT4/MT5 or the broker’s native platform on this dashboard. You can also access these platforms online.

After deciding on a download or web-based version, you need to search up for NFLX. Netflix stock will appear, and from there, you can open a buy order, and that’s it. You have invested in a Netflix stock.

3. Compare costs and features

Trading commissions have been dropped by the majority of online stock brokers, putting most (but not all) on a level playing field in terms of expenses.

There are, however, several significant changes. Beginner investors can benefit from some brokers’ educational resources, investment research, and other services.

Others provide you with the option of trading on international stock exchanges. Some even have physical locations, which may be beneficial if you want personal investment guidance.

There’s also the broker’s trading platform’s user-friendliness and functionality to consider. For example, many will allow you to test a demo version before you buy, and if that’s the case, we strongly advise you to do so.

4. Doing market research

It’s great that you have bought the Netflix share, but if you are not going to do market research, then you’ll blow your account.

The most difficult aspect of stock investing is doing the grunt work – research. Finding essential information about a firm and applying it to choose which stocks to purchase or sell involves a lot of effort.

You can do market research through stock analysis. The stock analysis consists of fundamental and technical analysis. Let’s define both of them.

Fundamental analysis

You wouldn’t hand over a large sum of money to someone you don’t know and expect them to develop it and return it to you, would you? The same is true when it comes to investing.

It’s a good thing you can utilize the Internet’s power to learn more about the firm. For example, you may just go to their website and go through their products, mission and vision, board of directors, and other information. You may also look at the company’s published articles.

This is the essence of fundamental analysis.

It is premised on the idea that a stock price does not always reflect the real underlying value company. To assess if a stock is fairly valued, fundamental analysts utilize valuation measures and other data. Fundamental analysis is intended for long-term investors seeking high profits.

Technical analysis

One of the inventors of technical analysis is Charles Henry Dow, the creator of the Wall Street Journal and co-founder of Dow Jones and Company. This approach uses historical price charts of past market behaviour to determine future price movement, triggering price movement and volume.

While fundamental research determines the security’s inherent worth, the technical analysis examines past price charts using technical indicators or oscillators, trading signals, and other tools to determine the security’s strengths and weaknesses. The supply and demand concept also influences the price of a stock.

When you see someone attempting to discover patterns in stock charts or discussing moving averages, they refer to technical analysis.

One key contrast is that fundamental research identifies long-term investment possibilities, whereas technical analysis analyses short-term market changes.

5. How much can you afford to invest in Netflix?

You’re nearly good to go! The final questions remain are; how many Netflix shares are you looking for, and what type of order is right for you?

In response to the number of shares, you can purchase individual shares of Netflix from any online brokers listed above.

Keep in mind that how much you invest should be depending on a range of variables; for example, if you don’t already have a diverse portfolio and a good emergency fund, you might want to hold off on investing in a single stock like Netflix for the time being.

If Netflix’s asking price is too high for you, bear in mind that some brokers will allow you to test the waters by purchasing fractional shares, which are fractions of a stock rather than the entire stock.

For the order type question, market orders and limit orders are the two most prevalent forms. You’re instructing the brokerage to buy the stock as quickly as possible by applying for a market order.

The actual pricing may differ somewhat from the price displayed when you place your purchase. A limit order tells your broker that you only want to buy the stock at a specific price, with the caveat that if the stock isn’t available at that price, the broker will cancel your order.

So there are five steps you need to follow to buy Netflix shares in South Africa.

The question popping in your head will be, “Is Netflix the right choice for me, or should I buy it”?

Well, let’s find out if Netflix is worth adding to your portfolio.

NASDAQ: NFLX, the pioneer in streaming entertainment, has been a major winner for investors, with a stock price rise of more than 450 percent in the last five years.

And as we mentioned above, it is part of an elite stock group, so yeah, Netflix is worth taking a risk. Here are some of the reasons you should buy Netflix:

Reasons to buy NFLX

New subscription growth is impressive

Netflix has spent the previous few years focusing on expanding its worldwide subscriber base. Netflix has made significant investments in local language content creation worldwide, and the trend has benefited the firm. With time, the company’s subscriber base grew.

In 2014, the firm attracted 8.3 million members, increasing to 16 million in 2015. Netflix’s audience grew from 18 million to 22 million to 28 million in the next five years. Last year, it had 27 million subscribers. It has 207.64 million members worldwide in the first quarter of 2021.

Canada and the United States of America 35.8% of the overall subscriber base is represented by this account. There was a big push in the business for Netflix due to the lockdown and transportation limitations.

Because individuals couldn’t go out to see movies or participate in other forms of entertainment such as live sports, the only choice was to watch Netflix from the comfort of their own homes. As a result, it resulted in a significant increase in the number of subscribers.

Cord-cutting trend

People were already abandoning traditional TV channels in search of better entertainment choices before the epidemic hit. Netflix has already begun to profit from the cord-cutting craze. Many families have abandoned traditional cable TV in favor of streaming alternatives as a result of widespread cord-cutting.

The upward trend will continue, according to market experts. Users are gravitating toward the streaming platform due to the ease with which they can consume information. Many homes have four to five platform memberships.

It indicates that people are not abandoning Netflix in favour of Apple, Amazon, or Disney but rather is experimenting with other services while remaining loyal to Netflix.

Strong fundamentals

As previously said, before acquiring a stock, investors should carefully consider the company’s fundamentals. Netflix has solid fundamentals, with the business reporting 3.98 million new streaming customers in three months in its most recent quarterly report.

In the coming quarter, it intends to hire 1 million new employees. The company’s earnings grew by 139 percent year over year, while sales increased by 24 percent. Netflix plans to break even in 2022, at which point it may return capital to shareholders through dividends or stock repurchases.

Content sets Netflix apart

Today, there are a plethora of streaming options to choose from, but what makes Netflix apart? It’s all about the content. Users will only join a platform if they love the material, and Netflix has enjoyed a slew of successful series since launching its regional content drive.

Subscribers are attracted to the material. As a result, even after boosting the costs for the basic and premium membership levels, the number of customers continues to rise.

Alternative income sources

Aside from streaming services, the firm generates money through advertisements and will soon start selling franchises.

The firm intends to generate money by selling toys, T-shirts, and concert tickets to your favourite concerts. In addition, more individuals will subscribe to Netflix as a result of the online shop. It also dabbles with podcasts and video games, in addition to consumer items.

Even if the online store’s contribution is minor, it might help increase income and draw customers to their streaming service.

Considering all of the above factors, NFLX is a perfect stock to buy.

After buying Netflix shares, there are some things you need to consider, so let’s discuss FAQs you may have:

Do I need to pay tax as a South African?

Because you are a foreigner who does not reside in the United States, you are only subject to the 30 percent dividend tax.

When the firm you invested in delivers dividends to your trading account, your broker will withhold the money. For example, if you bought 100 Netflix shares and received $0.10 per share in dividends, you would receive $10 minus $6, or $4. Consider it a good thing or a bad thing, but Netflix doesn’t pay dividends.

How much money can I invest as a South African?

SARS (South African Revenue Services) has categorized foreign investments into single discretionary allowance and foreign investment allowance.

SARS permits each South African resident to invest up to 1 million in foreign investments each year, their single discretionary allowance. You are immediately eligible for this, and you can purchase Netflix shares worth up to R1 million.

However, if you want to invest more than 1 million rands abroad, you’ll need to apply for a foreign investment allowance. It’ll be tough to get this since, unlike your single discretionary allowance, you’ll have to apply for it.

Will I get a dividend from Netflix?

Given that the business is growing quickly, the management wants to invest most of the profits in further growth. As a result, there will be no dividend yield.

What are the trading hours?

The US stock market’s regular trading hours are 9:30 a.m. to 4 p.m. Eastern Time on weekdays, excluding holidays.

Trading hours in South African Standard Time are from 4:30 p.m. to 11 p.m. during winters and from 3:30 p.m. to 10 p.m. during daylight saving time.

How do I buy Netflix shares online without a broker?

Online brokers have made it incredibly simple for newcomers to join up for and utilize their services in the past few years. As a result, opening an online brokerage account will be the most convenient way to get into the stock market for most beginning investors.

If you still want to invest without going via a broker, look for companies that provide a direct stock plan, which permits you to acquire shares from the firm for a low or no fee.

These programs may also provide the option of investing by a dollar amount rather than per share. In addition, they frequently allow customers to set up recurring payments on a specified schedule.

Another way to purchase stocks without a broker is to use a dividend reinvestment plan, allowing you to automatically reinvest dividends back into the business rather than getting them as income. However, just like direct stock plans, you’ll have to look for firms that offer these programs.

Can I get started with less than $100?

You can start investing with enough money to buy a single share if you create a brokerage account with no minimum balance and no transaction fees.

Some brokerages enable you to buy fractional shares, which means you could acquire a piece of a stock like Netflix, which has long traded for more than $300 per share, even if you only had $100 to invest. But, of course, the more money you put in, the better your chances of making a profit in the long run.

How many shares should I buy?

The number of shares you buy is determined by the amount of money you wish to invest. For example, if the price of a Netflix share is $500 and you have $1000 to invest, you could buy two shares.

You’ll have to round down if your brokerage doesn’t allow fractional trading and the numbers aren’t quite right. For example, if the stock is $510 and you have $1,000 to invest, you can only buy one share since two shares would cost $1020.

When to sell Netflix shares?

If you’re buying Netflix stock, you should be prepared to put your money away for at least five years. Because of stock market volatility, the value of your shares will likely decrease before increasing.

If you’re short on cash and your stocks have appreciated, you may consider selling them, but you’ll miss out on future profits.

What’s more important, though, is to think about when you shouldn’t sell your stock. For example, you may want to sell while the market is dropping to avoid more losses. However, this is a poor approach since you’ve locked in your losses once you sell.

A better strategy is to ride through the market’s volatility and strive for long-term returns, knowing that the market will eventually recover.

How to come up with a trading plan for Netflix shares?

After setting up your real money account, you’ll need to consider your position and risk management. Each position has a holding period and technical features that favour profit and loss objectives, necessitating a fast exit after meeting those objectives.

Consider the mental and other challenges you’ll face if you’re buying Netflix. The pricing will not always follow your instructions.

Luckily, you’ll have plenty of time to learn all aspects of trade management if you don’t overwhelm yourself with information.

Keep a daily diary of all your trades, including the reasons for taking risks, the holding durations, and the ultimate profit or loss figures. This diary of activities and insights sets the framework for a trading edge that will end your novice status and allow you to benefit from the market continuously.

Bottom line

You need to go to someone else if you’re searching for a stock that has the potential to produce 5x or 10x profits. Netflix can scale and transform how consumers consume entertainment.

You may begin your investment adventure by using online brokerage services such as Interactive Brokers or Firstrade.

No matter how many shares you acquire, keep in mind that the market is volatile, and there will be some highs and lows. Volatility is a must-have of the stock market, and while investing, you must consider your risk appetite.

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