How to Trade C3.ai Shares: (AI) Stock Trading Guide

Following C3.ai (AI) Inc.'s IPO at $42 per share on December 8, 2020, the stock witnessed notable price fluctuations. It opened at $100 the next day and subsequently rallied to about $140. As such, C3.ai may be of interest to many traders seeking new opportunities in the AI market. For those looking to trade C3.ai Inc. shares, this article provides essential guidance on the necessary steps.

Main Points:

• Trading C3.ai shares CFDs involves opening long and short positions on C3.ai to gain exposure to its stock price movements without owning the actual shares.
• Analysing trends and support and resistance levels can help traders make informed decisions based on C3.ai stock price movements.
• Margin and leverage trading allows traders to control larger positions with less capital but increases the risk of significant losses.
• Different methods can be applied to trading C3.ai shares, including day trading, swing trading, and position trading.

What Is C3.ai Share Trading?

Trading C3.ai stock entails buying and selling C3.ai shares to potentially capitalise on its price fluctuations. Through Contracts for Difference (CFDs), traders and investors can gain exposure to C3.ai's stock price movements without directly owning the shares. The CFDs of C3.ai shares are derivative instruments that reflect C3.ai’s stock price, enabling traders to profit from or incur losses based on the price differences.

Steps to Begin Trading C3.ai Share CFDs

While trading C3.ai share CFDs carries inherent risks, traders can adopt a guided approach to gain an edge and enhance potential profitability. These crucial steps are outlined as follows:

Choose A Trading Style

There are various methods of trading C3.ai share CFDs, and each approach is unique to individual traders. They include:

Day Trading C3.ai Shares

As a day trader, one can open long or short positions on the C3.ai stock to capitalise on short-term price movements, closing all positions within the same trading day. Day trading helps traders avoid the risks associated with holding stock positions overnight. However, being mindful of overly frequent day trading is crucial, as it can lead to accumulated transaction costs that may erode potential profits.

Swing Trading C3.ai Shares

Swing trading C3.ai involves opening long and short positions and holding them for a duration of time, usually from a few days to weeks, aiming to profit from potential price swings. With this style of trading, traders have more time to analyse AI market trends and new developments regarding C3.ai, Inc., and transaction costs are reduced compared to day trading.

Position Trading C3.ai Shares

The duration of position trading extends from several months to years. This trading style involves holding C3 AI shares for a longer term based on fundamental factors that can impact the company's growth in the long term. Market participants involved in position trading are usually institutions and investors with huge funds. The caveat to this trading approach is that overnight funding fees and susceptibility to sudden market events can adversely erode gains.

Open a CFD Trading Account

Whether you’re a seasoned trader or new to the stock market, you’ll need to open an account with a CFD provider to buy or sell C3.ai shares CFDs. Services for retail traders and investors include an online trading platform or web trader apps that work on smartphones, tablets, or PCs. Before opening an account, it is essential to:

• Have your ultimate financial goals written out
• Be prepared for the ups and downs of C3.ai share CFDs
• Understand the factors affecting C3.ai stock performance
• Understand the inherent risks associated with trading C3.ai share CFDs

These considerations will guide your decision-making processes as you trade C3.ai share CFDs.

Understand How to Read the C3.ai (AI) Stock Chart

Confusing stock charts can be a turn-off for both new and seasoned traders. Let's break down what you see on a C3.ai (AI) stock chart, whether you're looking at it on the Plus500 trading platform, the New York Stock Exchange, or any other exchange.

• Ticker Symbol (AI): This symbol, “AI”, is the identifier for C3.ai's stock on every exchange platform.
• Closing Price (AI): This is the last price a share of C3.ai traded for during regular market hours. It tells you how the stock performed that day.
• Bid-Ask Spread (AI): This shows the difference between the highest price (bid price) at which someone is willing to buy a C3.ai share and the lowest price (ask price) at which someone is willing to sell a C3.ai share. A smaller spread can mean that the stock is more liquid.
• Price Movement Lines: On the Plus500 platform, coloured lines show how the C3.ai share price moves throughout the day. The purple lines typically represent price increases, while the pink lines show price decreases.
• Percentage Change: The fluctuating percentage displayed in the information icon at the top left of the chart indicates the change in the stock's price during the trading day relative to the previous day’s closing price.
• Timeframe Selection: Most platforms let you switch between different periods (day, week, month) to see how C3.ai's price has moved over short and long stretches. This can help to identify both short and long-term trends.
• Chart X-Axis (Horizontal): This axis shows the timeframe you've chosen (hour, day, week, etc.) so you can track C3.ai's price changes over a specific period.
• Chart Y-Axis (Vertical): This axis shows the price of C3.ai shares in US dollars, giving you a clear picture of price movements within the chosen timeframe.

Understand C3 AI Margin and Leverage Trading

Trading C3.ai share CFDs involves the use of leverage. Although leverage helps to maximise potential gains by controlling larger contract sizes than your capital will generally allow, It also increases the risk of significant losses.

An example of leverage trading in C3.ai share CFDs is to enter a CFD contract for 200 shares at $20 per share.

Contract Size: 200 shares at $20 per share = $4,000.

If the CFD provider offers leverage, for instance, Plus500 offers 1:5 leverage for trading share CFDs. You won't need the full $4000 upfront.

Since the leverage offered is 1:5, requiring a 20% margin. A deposit of $800 (20% of $4,000) will be enough to open the position. However, sufficient funds will be needed to cover margins and potential price fluctuations.

Analyse the Price Movement of C3.ai Shares




Before opening long or short positions on C3.ai, it is essential to form concrete ideas on why the market may go long or short by conducting technical analysis and fundamental analysis of the C3.ai stock price.

Technical Analysis of C3.ai Stock Price

Performing technical analysis on C3.ai stock price involves several techniques such as:

1. Analysing C3.ai Stock Market Trend
The stock price of C3.ai may trend up or down. By using technical tools and indicators to identify the dominating direction of C3.ai stock price movement, traders can open long positions if they believe the stock price of C3.ai will reach new highs and, conversely, a short position if they believe the stock price of C3.ai will decline to lower lows.


2. Analysing Support and Resistance on the C3.ai Stock Chart
This involves finding defined support and resistance ranges on the C3.ai stock chart and analysing its price movement for price reversals or potential breakouts. By trading within a defined price range's support and resistance levels, traders can take advantage of short-term oscillation in C3.ai stock price movement. Furthermore, if the C3.ai stock price is ready for a potential breakout of its confined range, traders can use limit orders to enter bullish or bearish breakouts on increased volume.

Fundamental Analysis of C3.ai’s Stock

Beyond technical analysis, it is crucial to understand the fundamentals of what could lead to the strength or decline in the C3.ai stock price.

This involves the quantitative analysis of C3 AI key financial metrics such as:

1. Revenue: This is the top line on the C3.ai Inc. income statement. It reveals how much revenue C3.ai makes through its products and services.
2. Net Income (or Loss): This bottom-line figure on C3.ai Inc.'s income statement shows the company's short-term profitability and long-term potential.
3. Earnings per Share (EPS): This metric shows C3.ai profitability on a per-share basis, allowing easy comparison with other enterprise AI solution providers.
4. Price-to-Earnings Ratio (P/E): This ratio indicates how much investors will pay for $1 of C3.ai’s current earnings. If the P/E ratio of C3 AI shares is high, it may indicate investor optimism about future profitability.

Traders can also go further to analyse the qualitative details of C3.ai Inc. This involves analysing

• C3.ai revenue generation strategies
• C3.ai business model and revenue streams
• C3.ai has a competitive advantage over similar companies
• The strength of the C3 AI management team
• Other potential risks include intellectual properties, regulation, economic conditions, etc

Execute Trades on C3.ai Share CFDs

After conducting a comprehensive analysis of the C3.ai stock price and converging at a potential bias, traders can initiate a long position on C3.ai share CFD if their analysis lends bullish, or they can initiate a short position on C3.ai if their analysis lends bearish.

Before buying or shorting C3.ai shares, traders should understand the various order types available in the market.

Entering a Trade: To open a position on C3.ai shares, traders have two primary order types to choose from:

• Market Orders: This type of order allows traders to execute immediate trades on C3.ai shares at the current market price.
• Pending Orders: These orders let you set specific entry points. For instance, a buy-stop order will purchase C3.ai CFDs if the price reaches a certain level you specify. Conversely, a sell-stop order will sell C3.ai shares when the price drops to a specified level.

Exiting a Trade: To close a position on C3.ai shares, traders can use the following order types:

• Manual Closing: Traders can close their C3.ai CFD positions at any time.
• Stop Loss Orders: Stop orders automatically exit your buy or sell trades on C3.ai CFDs at a specific price point.
• Trailing Stop Orders: This automatically closes your C3.ai CFD position when a specified profit threshold is reached, thereby locking in gains.

Risk Management for Trading C3.ai Share CFDs

Risk management is important when trading contracts for differences (CFDs). This involves:

Cutting Losses
Letting go of a losing position can be emotionally challenging. However, a core principle in trading is to cut your losses before they escalate into substantial and then catastrophic losses. By "cutting losses early," you minimise your exposure to market risk and safeguard your account or portfolio from significant depletion.

Diversifying
Diversification is another cornerstone of risk management that can smoothen your returns over time, as opposed to having your returns dictated to a few volatile stocks. If you're interested in the AI industry and are considering buying AI stocks, you can diversify your portfolio by including other AI stocks such as Microsoft (MSFT), NVIDIA (NVDA), Amazon (AMZN), Tesla (TSLA), and various AI-related instruments like the AI index (BAIGUI).

Demo Trading
Many providers, including Plus500, offer demo accounts that allow you to trade virtually using "paper money." This will enable you to experiment with different trading strategies in a risk-free environment before risking real capital. It also lets you experience the live markets without fearing financial loss in case your trades don't pan out.

Conclusion

Trading C3.ai share CFDs provides an opportunity to gain exposure to the price fluctuations of C3.ai stock without owning the actual shares, though both potential profits and losses are magnified. By selecting an appropriate trading style, understanding margin trading, analysing the fundamental and technical indicators of C3.ai stock, and implementing effective risk management practices, traders can make informed decisions on when to enter and exit positions on C3.ai shares.