FAANG stocks

FAANG is an acronym for the five biggest companies in the world within the tech sector. These shares are featured on the largest US stock indices​, acting as benchmark for their industry. Notable indices include the Dow Jones Industrial Average (Dow 30) and S&P 500, which are two of the most reputable indices that traders look to when choosing a share. In particular, FAANG companies make up approximately 15% of the S&P 500 index, which is a heavy weighting, considering that there are 500 companies on the overall list.

FAANG stocks are most commonly traded in the long-term, due to their status as being some of the most reliable and stable. Although it is possible, it is less likely that these technology stocks will collapse in a market crash or period of recession, which helps to explain their endurance. Traders can either choose a long-term strategy, such as position trading​, or some may prefer to trade FAANG stocks in the short-term, with day trading​ or scalping strategies. When the stock market is volatile, or certain FAANG companies are affected by fundamental factors such as earnings reports and other news releases, FAANG share prices have the potential to soar or drop within a short period of time.

Overall, FAANG stocks are some of the best performing stocks in the share market. The total FAANG market cap equates to around $4.5 trillion and individual FAANG share prices have a heavy influence on the performance of its constituent indices, such as the Dow 30 and S&P 500. Read more about index trading​​ here.

One way to invest in FAANG stocks is to buy and sell the shares​​ through a stock exchange, such as the London or New York stock exchanges. This can be done through individual stockbrokers and will require you to pay the full value of the position upfront, which can amount to a large deposit of capital.

An alternative is to speculate on the price movements of the underlying shares through derivative products, such as spread bets and CFDs. These allow you to trade on margin, which means that you only have to deposit a fraction of the full trade value in order to get better exposure to the market. Leveraged trading​ comes with risks, however, so you should familiarise yourself with execution and order types before opening a potentially risky position.

To get started trading on FAANG share prices, simply follow the steps below:

Another way to invest in these technology giants is through share basket trading​, our new product that allows clients to speculate on the price movements of a basket of stocks, rather than only one security. This is also through spread betting and CFD trading, in a similar way to share trading. In particular, our ‘Big Tech’ basket allows you to trade with leverage on the price movements of the underlying shares, which include FAANG constituents Apple, Alphabet, Facebook and Microsoft, as well as other names within the tech market, such as Adobe, Oracle, Cisco, Salesforce and IBM.

For a full breakdown on each component and their constituent weighting, view our instrument page for the Big Tech share basket​.

It is also possible to invest in FAANG stocks through ETF trading. Exchange-traded funds​​ are investment funds that hold a collection of underlying shares within a particular sector and track their performance over time. You can spread bet or trade CFDs on popular ETFs that track the price movements of underlying FAANG stocks on our platform, which include the following:

The world of technology is always changing with new developments within the sector, and so are the companies that we consider ‘tech giants’. While FAANG stocks still promise value for investors and traders alike, undoubtedly, there will be a new boom of tech stocks within the next decade that promise equal growth.

For example, some traders believe that FAANG stock performance is slowing and we should instead look for new and fresh options. The acronym TAND is becoming more popular, which stands for Tesla, Activision, Nvidia and Disney, which could be the next FAANG stocks for a new generation of traders. However, for the foreseeable future, the above list of the big five tech stocks may continue to deliver within the technology market.

Our award-winning online trading platform​* comes with a wide range of news sources for traders of all experience levels. Our news and analysis​ section is updated in real time with observations from our market analysts so that you do not to have do as much research. In addition, our news and insights​ section that is available when you register for a trading account provides news commentaries from Reuters, market data, key economic announcements and fundamental analysis reports on the stock market from Morningstar.

Another way to keep informed with the latest FAANG news is through our economic calendar, which provides updates on fundamental data that may have an effect on a FAANG stock’s performance, such as business inventories and earnings reports. The calendar can be personalised to suit your trading style, with the option to filter by country, timeframe and economic indicator.