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After announcing some positive preliminary findings for a coronavirus vaccine in May, biotech company Moderna’s stock closed at a record high of $80 — even though the company currently has no approved products on the market.
Moderna has received some criticism from vaccine experts that the news may have been premature, but the FDA has given its approval for the company's second phase of clinical trials. Moderna is holding out hope that it will win the race to a vaccine — and so are the company’s investors.
Want to invest in a potential coronavirus vaccine? Here’s how to buy Moderna stock.
1. Do some research on Moderna
Just because you’ve seen a company in headlines doesn’t make it a slam-dunk stock pick. Taking the time to research a stock can help you make informed decisions about what you add to your portfolio. By looking at revenue, net income and earnings, along with other important factors such as management and any competitive advantages, you can develop a well-rounded perspective on a company.
You should also consider whether Moderna stock is right for you personally — any stock you buy should align with your investment goals and risk tolerance. If you’re not sure where to start, learn more in our article on how to do stock research.
2. Decide how much to invest in Moderna stock
If your financial situation and investment goals align with adding Moderna to your portfolio, you’ll have to figure out exactly how much money to invest. Some high-profile stocks (such as Amazon) trade for thousands of dollars a share.
Fortunately, buying Moderna stock won’t break the bank: Over the past month, the stock has mostly traded between $50 and $80 a share.
Keep in mind, that range is significantly higher than Moderna has traded in the past. Before the company's vaccine news, a trade price under $20 was typical. Buying a stock while it's hot doesn't guarantee continued returns — in fact, it can often result in losses.
As you decide how much to invest in Moderna stock, consider these general rules of thumb:
Stocks are a long-term investment. If you think you’ll need the money you plan to invest in Moderna within the next five years, you may want to reconsider. Stocks are volatile; Moderna may be even more so as it works on this vaccine. The time frame for your investment should be long enough to allow you to ride out that volatility, so you don't have to sell while the stock is down. Here are some safer ways to save for short-term goals.
Don’t dedicate more than 10% of your portfolio to individual stocks. Investing in individual stocks is much safer when done in moderation. By investing the majority of your portfolio in mutual funds (such as index funds), you lower your risk and increase diversification.
Consider your existing asset allocation. Be sure that your portfolio is well-diversified by adding companies in different industries, and balancing emerging growth stocks with mature, reliable companies. That way, when the next market downturn hits, your portfolio will be equipped to handle it.
3. Open a brokerage account
In order to buy Moderna stock (or any other stock) you’ll need a brokerage account. Online brokers offer an easy way to start investing. The process of opening and funding your account is completely virtual and takes as little as 15 minutes.
» Want more help? Read about how to open a brokerage account.
It’s best to find a broker with no commissions, excellent customer service and useful tools and resources. Our favorite picks below fit the bill, as do the brokers in our best brokers for stock trading roundup.
If you’re excited about Moderna but don’t want to purchase a full share, services such as Robinhood or Stash offer fractional shares, which allow you to invest a smaller amount and purchase only a portion of the stock.
4. Buy Moderna stock
Now that you’ve done your research, figured out how many shares you want to buy and have your brokerage account set up, you’re ready to buy Moderna stock.
A stock’s price is determined by its bid-ask spread, which is the gap between the price buyers are willing to pay and the price sellers are willing to accept. The bid-ask spread changes throughout each trading day.
When you’re ready to buy the stock, you’ll do so through your online broker's website or trading platform. You'll be asked to choose an order type, which determines when and how your order to buy Moderna stock is completed.
Nerd tip: Moderna's stock symbol is MRNA. This is how Moderna will be referred to within your brokerage account.
There are several order types, but it’s best to stick with one of the two options below.
Market orders execute as quickly as possible at the lowest price. The price you pay for the stock may vary slightly from the price you see when placing your order, especially if the stock is volatile. For example, if you submitted a market order for Moderna stock at $58 a share, the order might execute at $59 because of price fluctuations.
Limit orders are placed only if the stock price hits the level you've set. Maybe you’re only willing to buy Moderna stock if it hits $40 a share. With limit orders, you can have the purchase trigger when the stock price reaches your predetermined threshold of $40. The risk with limit orders is that your order may not get executed in full or at all if the stock never reaches the price you’ve set.
Once your order goes through, you’re officially a Moderna shareholder.
» Need more info? Consult our full guide on how to buy stocks.