How to buy and short easyJet shares
As one of the main airline groups in the UK, easyJet has been flying into strong headwinds during the coronavirus pandemic. Here, we take you through how to buy and short easyJet shares.
How to buy easyJet shares
Investing and buying are two very different ways to get exposure to positive movements in the easyJet (EZJ) share price. Investing means that you would be taking direct ownership of easyJet shares, while buying means that you’re trading on the easyJet share price with derivatives like CFDs. With us you can only trade on easyJet shares.
When you buy easyJet shares by trading on the share price with CFDs, you won’t take ownership of the actual shares, but you’ll be able to open a position using leverage. This will grant you full market exposure for an initial deposit – known as margin – which can magnify your profits, but also your potential losses.
The steps to buy asyJet shares are outlined below:
Trading easyJet shares
- Create or log in to your trading account and go to our trading platform
- Search for ‘easyJet' or 'EZJ'
- Choose your position size
- Select buy and monitor your trade
You can speculate on the easyJet share price with CFDs. With derivatives, you’ll be able to:
- Get full exposure with a 20%-25% deposit on almost all of our tier-one shares1
- Hedge your positions with CFDs and offset losses against profits for tax purposes2
Open an account now to get started
How to short easyJet shares
If you are a trader with a negative outlook on the easyJet share price, you can short easyJet shares with CFDs. A short position will be profitable if the easyJet share price falls.
Shorting easyJet shares
- Create or log in to your trading account and go to our trading platform
- Search for ‘easyJet’ or 'EZJ'
- Choose your position size
- Choose ‘sell’ in the deal ticket to go short and speculate on the price falling
- Confirm and monitor your short position
Below, you can see a screenshot from our platform of the easyJet share price from 14 November 2019 to 14 May 2020.
The basics of easyJet shares
To take a position on easyJet, you’ll need to know that the company is listed on the London Stock Exchange under the 'EZJ' ticker. It’s a blue-chip constituent of the FTSE 100 holding a place on the index since 2013.
The price of easyJet shares is determined to a large degree by the number of flights it has in the air at any one time. This is because more flights correlates to more customers, and more customers means higher annual revenues.
With the outbreak of the coronavirus pandemic, easyJet took the decision to ground its entire fleet on 30 March 2020. As a result, its share price took a significant hit and it’s likely to remain on shaky ground until a plan for getting back to business as usual is revealed.
What is easyJet’s business model?
The easyJet business model is built on being efficient and low cost. It aims to keep prices down, while serving a large number of customers per day. This is made possible by easyJet’s large fleet of 318 aircraft across its UK, European and Swiss subsidiaries,3 and it claims that its fleet is one of the youngest in the world – with an average age per aircraft of 6.8 years.3
The company also has a large number of take-off and landing slots at different airports in the UK and Europe – making it possible to maximise the time spent flying customers to their destinations.
For example, when Thomas Cook went bust in 2019, easyJet was able to pick up 12 summer slot pairs and eight winter slot pairs at the UK’s Gatwick Airport. It also secured six summer slot pairs and one winter slot pair at the UK’s Bristol Airport.
The easyJet brand is also a large part of the company, with the iconic orange and white being instantly identifiable at many UK and European airports.
Key personnel at easyJet: who runs the company?
There are 11 people on the easyJet board of directors:
| Position | |
| John Barton | Non-executive chairman |
| Charles Gurassa | Non-executive deputy chairman and senior independent director |
| Johan Lundgren | Chief executive officer |
| Andrew Findlay | Chief financial officer |
| Dr Andreas Bierwirth | Independent non-executive director |
| Catherine Bradley CBE | Independent non-executive director |
| Dame Moya Greene | Independent non-executive director |
| Dr Anastasia Lauterbach | Independent non-executive director |
| Nicholas Leeder | Independent non-executive director |
| Andy Martin | Independent non-executive director |
| Julie Southern | Independent non-executive director |
How to analyse the easyJet share price
Analysis can be broken down into technical and fundamental.
- Technical analysis is the study and interpretation of chart patterns using technical indicators to confirm or dispute a trend and price action
- Fundamental analysis attempts to determine the inherent profitability of a company based on financial statements, company leadership and other macroeconomic factors
Popular technical indicators that can help you spot patterns in the easyJet share price include the stochastic oscillator, parabolic SAR, Williams %R indicator and any one of the many channel trading indicators. All of these are available in our trading platform – and can be overlaid onto a price chart at the click of a button.
Learn more about our trading platform
Popular fundamental metrics you can use to determine the value of easyJet shares include earnings per share (EPS), price-to-earnings (P/E) and return on equity (ROE).
- EPS attempts to forecast how profitable easyJet is. To calculate earnings per share, divide easyJet’s profit by the number of outstanding shares
- P/E shows how much you’d have to spend on easyJet shares to make £1 in profit. To calculate the price-to-earnings ratio, divide easyJet’s share price by its EPS
- ROE compares easyJet’s income from its assets against its shareholder equity. To calculate return on equity, you’d divide easyJet’s net income by stakeholder equity
Footnotes
1Deposits on leveraged trades are 20%-25% for 99.14% of tier-one shares (correct as of 1 June 2020). For more information, view our share trading margin rates.
2Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
3easyJet 2020
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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