How to buy, sell and short easyJet shares

How to buy or invest in 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’re taking direct ownership of easyJet shares, while buying means that you’re trading on the easyJet share price with derivatives like spread bets and CFDs.

When you invest in easyJet shares, you’ll get voting rights in company matters and be eligible to receive dividends. Investing means you’ll have to commit the full value of the position upfront, but your losses are capped at the total size of your investment.

When you buy easyJet shares by trading on the share price with spread bets or 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 or invest in easyJet shares are outlined below:

How much would it cost to invest in easyJet?

Since easyJet is a UK company, you’ll receive our best commission on UK shares when investing in easyJet with us. Our best commission on UK shares is available to clients who opened three or more positions on their share dealing account in the previous month.

If investing isn’t for you, you can still speculate on the easyJet share price with spread bets and CFDs. With derivatives, you’ll be able to:

• Get full exposure with a 20%-25% deposit on almost all of our tier-one shares¹
• Spread bet without paying tax on any profits²
• Hedge your positions with CFDs and offset losses against profits for tax purposes²

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How to sell and short easyJet shares

If you decide to invest in easyJet shares, the day may come when you want to close your position – either to take a profit or to cut a loss. Once you sell your shares to close your investment position, you’ll no longer have a stake in easyJet, and you’ll no longer receive any of the benefits afforded to easyJet shareholders.

Alternatively, if you are a trader with a negative outlook on the easyJet share price, you can short easyJet shares with spread bets and CFDs. A short position will be profitable if the easyJet share price falls.

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:

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.

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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