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Table of Contents
Netflix is one of the world’s largest entertainment services companies. The business, headquartered in California, offers streamed broadcasts as one of its key selling points.
In July 2024 it has over 277 million subscriber customers in almost 200 countries – that’s up over 16% year-on-year and an increase of over eight million on the first quarter of 2024. They pay for television series, documentaries, feature films and mobile games across a wide variety of genres and languages.
Members can play, pause and resume watching content as much as they want, anytime, anywhere. Netflix offers several different tiers of pricing so that consumers can select a plan that best fits their circumstances and needs.
Recent hit shows include the third series of Bridgerton, Baby Reindeer, Queen of Tears and The Great Indian Kapil Show. Popular films in the last few months were Under Paris, Atlas and Hit Man. The Roast of Tom Brady attracted the service’s largest ever live audience.
Here’s what there is to know about buying and selling Netflix shares.
How to buy Netflix shares
There are several steps to take once you’ve satisfied yourself about the reasons for buying shares in a particular company.
1 – Open an account
Whether you’re a seasoned share trader, or someone who is brand new to stock market-based investments, if you want to buy shares in Netflix, you’ll need to open an account with a regulated brokerage.
Stockbroking services for DIY investors come in a range of guises – from online investing platforms to investment trading apps that work off your smartphone or tablet.
Before opening an account here are some things to keep in mind:
- keep your ultimate financial goals in mind
- be prepared to ride out stock market ups and downs
- aim to keep trading costs to a minimum
- remember that share investing can prompt tax charges, for example, when selling stock.
Before buying any shares ask yourself:
- should I take financial advice?
- am I comfortable with the level of risk?
- what’s my budget?
- can I afford to lose money?
- do I understand the company in which I’m looking to invest?
- am I protected if my platform provider/adviser goes out of business?
2 – Know where Netflix is traded
The ticker symbol for Netflix is NFLX. The company is traded on the Nasdaq in the US. Nasdaq’s trading hours are 2.30pm – 9pm (UK time) Monday to Friday.
You should be able to buy US shares through most brokerage accounts. Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.
Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
You will be asked to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).
As with UK shares, any profit on US shares will be subject to Capital Gains Tax (CGT), unless you hold the shares in an Individual Savings Account (ISA) or Self-Invested Personal Pension (SIPP).
3 – Do your research
To find out more about Netflix, go online and visit the company’s investor relations page.
4 – Decide your investment strategy
People tend to invest either with a lump sum purchase, or via smaller amounts over time.
The latter method is often referred to as a means of ‘pound cost averaging’, a stock market hack which may help you pay less per share on average over time. Rather than waiting to build up a lump sum, it means an investor’s money is being put to use in the market straightaway.
5 – Place an order
Once you’re ready to buy shares in Netflix, log in to your investing account or trading app. Type in the ticker symbol NFLX and the number of shares you want to buy, or the amount of money you’re prepared to invest.
6 – Review performance
Whether your share portfolio is crammed full of companies or holds only a handful of stocks, we believe it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.
Netflix Stock Price 5-Year Performance
The graph below displays the past performance of Netflix. Past performance is not a reliable indicator of future results.
Investments in a currency other than sterling, are exposed to currency exchange risk. Currency exchange rates are constantly changing which may therefore affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin.
- Q2 revenue at $9.56bn, up on $8.19bn in Q2 2023
- Q2 net income at $2.63bn compared with $1.31bn a year earlier
- Q1 net income of $2.14bn, against $1.49bn 12 months earlier
- Earnings per share of $4.88 against $3.29 in Q2 2023
- 8.05 million subscribers added in Q2 2024.
How to sell Netflix stocks
When you want to sell your holdings, log in to your investing platform, type in the ticker symbol and select the amount you want to sell.
If you’ve made a substantial profit, you may be liable to CGT when you come to sell your holdings, especially if your shares were held outside a tax-exempt wrapper such as an ISA.
The CGT tax-free allowance for the tax year 2024-25 is £3,000, half the figure of £6,000 in the previous tax year. Find out more here about CGT, rates and allowances.
Tax treatment depends on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
Why own stocks?
It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends, or a combination of both? Your investment objective will determine what type of shares you may consider investing in, whether high-growth technology shares, or more defensive companies with an income dividend stream.
Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.
That said, other factors such as takeover rumours can drive up a company’s share price. Some investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.
How to invest in Netflix via a fund
Investing directly in individual stocks will, hopefully, be a profitable experience. It may also qualify you for shareholder perks specific to the company in question.
It can also leave you vulnerable to stock market volatility and unforeseen swings in share prices. Nowadays, even a solo tweet – let alone a full-blown geo-political conflict – can send shock waves through the stock market.
That’s why, financial experts recommend that most people invest in a diversified mix of asset classes and investment funds that hold hundreds, if not thousands, of company shares.
Being a large component of the Nasdaq index, Netflix is found in many ‘active’ and ‘passive’ (index tracker) funds incorporating a bias towards the US.
Frequently Asked Questions
Does Netflix pay a dividend?
Dividends are a distribution, usually in cash, generally paid by a company to its shareholders half-yearly. Payments are usually met out of that year’s earnings. Companies aren’t obliged to pay a dividend, but may choose to do so for a number of reasons – as a gesture of a company’s support to its financial backers, for example, or as an incentive to shareholders to continue owning shares.
At present, Netflix is not anticipated to pay a dividend over the next 12 months.
Can I buy Netflix shares with a debit card?
Yes, in the sense that you’d need to add funds using an appointed card to an existing online investing service or trading app before making the share trade from there.
What does it cost to trade Netflix shares?
This will vary depending on the investment service/platform that an investor is using to trade.
Broadly speaking, there are three main types of fees. First is a share trading fee that investors are charged by a platform each time they buy or sell shares. Note that some platforms charge no fee for this activity, while others may charge a flat fee of typically between £6 and £12.
Second comes the platform fee which is typically levied as an annual fee charged for holding shares on a particular investing platform. Again, some providers impose no fee, others charge a flat fee, and some services charge a percentage, typically 0.25% to 0.45% per annum of the value of an underlying portfolio.
If you buy or sell shares denominated in a foreign currency, such as dollars as relating to Netflix, nearly all of the investing platforms charge a foreign exchange fee. Again, this will vary amongst providers, but tends to sit in a range from 0.5% to 1.5% per transaction.