Aurora Cannabis Stock CFD Investment Options

Overview

Aurora Cannabis (NYSE; TSX: ACB) was founded in 2006 by Terry Booth (CEO), Steve Dobler, Dale Lesak and Chris Mayerson. The company obtained its license by Canadian government health department to grow and sell medical cannabis in 2014, followed by permission to produce and sell cannabis oils in 2016 and 2017 respectively.

During that time, the company has managed to open and acquire multiple facilities in and outside of Canada. Aurora currently operates in 23 countries and the 24th is already on its way: the company recently announced that it’s acquiring a majority interest in Portugal’s Gaia Pharm, which will be renamed to Aurora Portugal.

Aurora is the second largest cannabis company in the world by market capitalization (after Canopy Growth Corporation) and the industry champion in terms of production when it’s at full capacity. The company is promising to reach the annual production capacity of 500,000 kilos by mid-2020, and has managed to capture 20% of the Canadian recreational market in the Q4 2018. None of its peers are even close to keeping pace. However, it’s market cap of a little over $8 billion is barely over half that of Canopy Growth’s market cap.

Aurora Cannabis issues shares at an outstanding pace, jumping from around 16 million shares to 998.1 million shares in less than 5 years, and as experts believe, will reach more than 1 billion by the end of fiscal 2019.

ACB on the New York Stock Exchange (NYSE)

ACB on the New York Stock Exchange (NYSE)

Last year the company has appointed Nelson Peltz, (chairman of the board of directors for Wendy’s and a member of the board for P&G and Sysco) as a strategic advisor to help it explore potential partnerships. According to CEO Terry Booth, Aurora Cannabis hopes that adding Peltz as a strategic advisor will improve its prospects for landing a big partner.

Aurora Cannabis (NYSE: ACB) recently announced another acquisition deal worth around US$132 million, buying a privately held Whistler Medical Marijuana, one of the first Canadian licensed medical cannabis producers with a good reputation in the market, and a strong track record of profitability. Investors cheered Aurora’s acquisition of Whistler, with Aurora’s share price jumping on news of the deal. Aurora Cannabis CEO Terry Booth said that his company plans to leverage its distribution channels in Canada and in international markets to increase the market reach for Whistler’s premium organic cannabis brands.

Aurora has been aggressively expanding its production potential in an effort to secure lucrative long-term supply deals, and perhaps attract a brand-name partner in the beverage, snack, tobacco, or pharmaceutical industry. Plus, with the legal cannabis market still nascent, Aurora projects to have a good chance of grabbing market share in the early stages of legal marijuana sales.

The reality in the Canadian marijuana market right now is that capacity is king. That’s not likely to change anytime soon. And if Aurora maintains an industry-leading capacity, the company just might wear the crown instead of Canopy Growth.

For investors seeking exposure to Aurora stock, one of the interesting options, beyond directly buying the share through a stock broker, is buying a CFD on the share price.  

Benefits of the CFD investments

CFD trading enables you to take advantage of the price fluctuations of financial instruments such as public stocks, indices, ETFs and others. In other words, the investor enters a contractual agreement with the CFD broker to exchange the cash difference in price between the opening and closing prices of the contract. The main difference between CFD trading and share trading is when you trade a CFD, you don’t need to buy the underlying share, but can still benefit if the market moves in your favor.

Leveraged Trading. With CFD being a leveraged product, you only need to deposit a small percentage of the full value of the trade in order to open a position, since you don’t actually own the asset or instrument you have chosen to trade. This allows traders to open larger positions than their capital would otherwise allow. In Cannabis stocks the maximum leverage is usually in the range of 5% to 20% of the actual stock full price.

Diversified Risks. Bioscience companies in general, and Cannabis companies specifically, represent a volatile sector, and as such are high-risk investments, mainly due to ambiguous legal status. By trading an index versus owning a stock itself,  you can:

  • Enter the investment on a smaller scale than would typically be required to own a package of stocks
  • Close the investment quickly if you identify a need

Many major traders have recently added cannabis stocks CFDs in their offerings, and Top 10 CFD Brokers expert team is happy to present you the analysis.

Aurora Cannabis CFD

Aurora Cannabis (NYSE: ACB) CFD openings are available for purchase and trade with:

Trade Aurora Cannabis Stock with Plus500

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Benefits of CFD trading with Plus500:

  • Leverage of up to 1:5 on cannabis share CFDs. The broker claims that one can start trading with as little as £100 to gain the leveraged effect of £500 investment.
  • Initial margin: 20%
  • Tight spreads as well as no trading commissions.
  • Access to advanced risk management tools, most of which are completely free of charge. Stop Losses and Limits to lock in your profits and minimize risk.
  • Variety of CFDs on leading producers of medical cannabis-related products (and cannabinoid derivatives), such as Canopy Growth, Cronos Group, Tilray, Aurora Cannabis, and GW Pharmaceuticals.

Trade Aurora Cannabis CFD with Plus500

 

Other Brokers

IG – Margin/leverage: 25% (1:4) (0 – 30000 Shares)

Xtrade -Margin/leverage: 20% (1:5)

Libertex   -Margin/leverage: 10% (1:10)

Fortrade -Margin/leverage: 10% (1:10)