How to buy and short Shell shares

How to buy Shell shares

You can ‘buy’ Shell shares by speculating on movements in the share price with financial derivatives like CFDs. This enables you to go ‘long’ when the share price is rising – or ‘short’ when it falls – without actually owning the asset. Opening a position in this way makes use of leverage, which gives you full market exposure for an initial deposit.

Follow the steps below to buy Shell shares:

Trading Shell shares

1. Create or log in to your trading account and go to our trading platform
2. Search for ‘Royal Dutch Shell A’ or ‘Royal Dutch Shell B’ shares (learn about the differences)
3. Choose your position size
4. Click ‘buy’ in the deal ticket
5. Open your position and monitor your trade

With CFDs 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

How to short Shell shares

You can short Shell’s shares with CFDs if you think the share price is going to drop.

Follow these steps to sell or short Shell shares:

Shorting Shell shares

1. Create or log in to your trading account and go to our trading platform
2. Search for ‘Royal Dutch Shell A’ or ‘Royal Dutch Shell B’ shares (learn about the differences)
3. Choose your position size
4. Click ‘sell’ in the deal ticket
5. Confirm and monitor your short position

Shell’s live market prices

Shell shares: the basics

Royal Dutch Shell has a primary listing on the London Stock Exchange (LSE) and is a member of the FTSE 100 index. It has secondary listings on Euronext Amsterdam and the New York Stock Exchange (NYSE).

The company has two classes of shares listed on the LSE:

• ‘A’ shares (RDSA) – these shares have a Dutch source for tax purposes, meaning cash dividends are paid out in euros and are subject to a Dutch withholding tax of 15%
• ‘B’ shares (RDSB) – this class of shares has a UK source. Here, cash dividends are paid out in pounds and aren’t subject to any withholding tax

Shell’s share price is closely linked to the price of oil, making it very susceptible to the market forces influencing supply and demand. However, the company is able to mitigate oil price volatility with its oil trading unit.

What is Shell’s business model?

Royal Dutch Shell is a global group of energy and petrochemical companies founded more than a century ago. Headquartered in the Netherlands, Shell operates in more than 70 countries and employs over 80,000 people.

Shell’s activities are split into four segments: integrated gas, upstream, downstream and new energies. The company also has a dedicated ‘projects and technology’ division to provide technical assistance and functional leadership to the various business units.

Shell extracts crude oil (which is refined and sold across a range of products) and natural gas, and manufactures and markets petrochemicals. In recent years the company has started to transform its business model by investing in more eco-friendly technologies, like biofuels and renewable energy, with the aim of becoming a net-zero emissions energy business by 2050.

Shell key personnel: who manages the company?

There are 12 people on the Shell board of directors:

How to analyse Shell’s share price

To analyse Shell’s share price properly, you need to consider both fundamental and technical analysis.

Fundamental analysis is focused on external events and influences, financial statements and industry trends. This is done to determine the factors that could cause a company’s share price to rise or fall, as well as the profitability of a company.

Fundamental metrics you can use to determine the value of Shell include price-to-earnings ratio (P/E ratio), return on equity (ROE) and earnings per share (EPS).

• EPS measures Shell’s profitability. To calculate earnings per share, divide Shell’s profit by the number of outstanding shares
• P/E shows how much you’d have to spend on Shell shares to make £1 in profit. To calculate the price-to-earnings ratio, divide Shell’s share price by its EPS
• ROE compares Shell’s income from its assets against its shareholder equity. To calculate return on equity, you’d divide Shell’s net income by stakeholder equity

Technical analysis is focused on price chart movements, using indicators and price action to detect patterns and trends. This could help determine what a share price might do in the future. Popular technical indicators include the parabolic stop and reverse (SAR), moving averages and relative strength index (RSI).

Shell’s financial information for fundamental analysis is available on the company’s website and in its annual report. The tools needed for technical analysis are available on our trading platforms, and can be overlaid onto a price chart for you to view.

Buying Shell shares summed up

• With us, you can ‘buy’ Shell shares using CFDs which is a derivative. The processes are simple and cost-effective
• Shares in Shell can be analysed using fundamental and technical analysis techniques
• Fundamental analysis involves assessing external factors, industry trends and financial information
• Technical analysis involves the study of price charts using indicators to spot patterns
• Shell’s share price has fallen in response to the lower demand for oil caused by the Covid-19 pandemic

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