How To Buy Shell Stock

How To Buy Shell Stock

Welcome to Trading Brokers step by step guide to buying Shell stock. Here you will find an easy to understand explanation of trading Shell stock. This includes how to buy Shell shares online, what you need to trade Shell stock and how to open a trading account with a stock broker so that you can buy Shell stock online today.

Maybe you have heard of buying Shell stock online or through a friend. Perhaps you are looking to trade and are curious about the different options available to you. Whether you are looking to speculate, invest or just learn more, this guide on how to buy Shell stock can help you along your journey.

Overview of Shell

Royal Dutch Shell Plc is one of the major producers of oil and gas in the world. Based in Hague, Netherlands, the company is engaged in exploring crude oil and natural gas around the globe.

The company was founded in 1907 through merger of Netherlands-based Royal Dutch Petroleum Co. and United Kingdom-based Shell Transport and Trading Co. The amalgamation was driven by the need to better compete in the world with Standard Oil at that time.

Operational segments

The company mainly operates through the following segments.

Integrated Gas

The segment is responsible for liquefaction of gas and the conversion of gas to liquid fuel and other products and their transportation. It also manages integrated activities including production and marketing of gas.

Upstream

The Upstream segment handles the exploration of crude oil and natural gas, as well as extraction processes. It also manages transportation and sale of oil and gas.

Downstream

The Downstream segment is engaged in management of various oil products and chemical processes, as well as trading activities including conversion of crude oil and other stock into usable products that are marketed and shipped across the world for domestic and industrial use.

Corporate

The Corporate segment includes holdings, treasury, insurance, and central functions of Shell.

Shell growth prospects

The world is increasingly switching to cleaner energy options that has become a point of concern for major oil and gas producers including Shell, which needs to modify its portfolio to keep growing in the coming years.

Future of crude oil

Crude oil has seen weak demand in the recent years, though the long-term predictions still suggests that nearly 70 percent energy demand of the world will be fulfilled by hydrocarbons in future. So, we can say that oil will still be in demand in the years to come. However, preference for low-carbon energy substitutes including electricity can largely affect the demand for crude oil that can potentially hurt Shell unless it considers expanding its portfolio to address the changing energy needs of the economies around the world.

Low oil prices

Shell stock has lost most of its value in the recent years due to consistent weak prices of oil. Any rise in oil demand and oil prices will considerably help the company in increasing its revenue. However, if the prices remained weak, it would further hurt the growth of the company.

Costs

Whenever oil prices go down, oil producers. like Shell, have to deal with the surplus crude oil, besides elevated costs related to operating and maintaining oil rigs and paying its workers. Weak operating margins and high expenses continue to be a burden for Shell, which needs to find a permanent solution for the issue. If the company managed to reduce spending and managed to generate strong operating cash flow, it will help it in surviving difficult economic conditions in future.

A shift towards sustainability

Shell needs to significantly modify its long-term strategy to succeed in the coming years. The demand for renewable and clean energy is increasing, and Shell has not done much about it. However, the company can attract more investors if it starts shifting its focus on producing clean energy.

Investing in Shell

Investing in Shell stock is when you buy Shell shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Shell stock in order to try and make a profit when the Shell stock price increases in value.

Trading Shell stock

Trading Shell stock is when a trader speculates on the movement in the Shell stock price without actually owning the shares in Shell. Traders tend to buy and sell Shell stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.

You can buy and sell Shell stock online through various methods including spot markets, futures contracts, options contracts, spread bets, CFDs (contracts for differences) and ETFs (exchange-traded funds).

Shell CFDs

One of the most popular ways to trade Shell stock is via CFDs (contracts for differences). When trading Shell CFDs, you do not actually invest in Shell shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Shell stock price. A CFD is a financial contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with their own personal objectives. Traders would open long (buy) positions, if they think the stock price of Shell will rise or short (sell) positions if they thought that the Shell stock price will fall. The difference in price between the entry and exit price is the traders realised profit or loss, excluding any broker commission and fees.

For example, if you think Shell shares are going to increase in price, you could buy a share CFD on the company. You will exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares increase in price and making a loss if they decrease in price.

On the contrary, if you think Shell shares are going to decrease in price, you could sell a share CFD on the company. You will still exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares decrease in price and making a loss if they increase in price.

Shell futures

Futures contracts are an agreement to buy or sell a specified asset at a certain date and price. Shell investors can use futures trading to speculate on the price movement of Shell stock in order to try and make a profit. Traders would look to go long (buy) a futures contract if they believe the price will rise or short (sell) a futures contract if they believe the price will fall. The difference in price between the price at the start and expiry date of the futures contract is the profit or loss from the contract.

Shell spread betting

Spread betting is a financial derivative that enables traders to speculate on Shell stock falling or rising without taking ownership of the underlying asset. If the trader makes a correct prediction and the asset does move in that direction, they could make a profit, minus any broker fees. On the other hand, if the price moves against their prediction, they would incur a loss.

Financial spread betting is similar in ways to CFD trading except that you are betting a fixed amount per point on the Shell stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.

Shell options

Shell options are financial instruments that are derivatives based on the value of Shell’s stock. Traders usually enter into calls when they expect the price of the underlying asset to increase, and puts when they expect the price to decrease. Option contracts come with an expiration date before which the holder needs to exercise their option to buy or sell an underlying asset at an agreed-upon price. The stated price on an option is known as the strike price.

Buyers can choose to exercise their calls and puts or not whereas sellers are obligated according to the buyer decision. Therefore, the sellers (writers) can be exposed to more risk than buyers whose losses can be limited to the premium paid for the contract in the instance they do not exercise the contract. On the other hand, sellers could lose more depending on the Shell market price.

Shell ETFs

Exchange Traded Funds (ETFs) enable traders to invest in a basket of securities that trade intraday like individual stocks on an exchange, and are typically designed to track the performance of an existing market or group of markets.

Each ETF is usually focused on a specific sector, asset class, or category. ETFs can be commonly used to help diversify an investment portfolio and create a mini-portfolio, or, for the active trader, they can be used to try and take advantage of price movements.

Shell is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Shell, may consider ETFs.

Where to buy Shell stock?

Stock trades are processed via a stock exchange, where a stock broker represents each investor. The majority of investors will nowadays use an online stock broker to buy and sell stocks through a stock trading platform which will enable them to connect to the stock exchange. You can see a selection of our best stock brokers below with whom you can open an account to trade stocks online.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.

ASIC, BVI, CBI, FFAJ, FSA, FSCA

Min $100 Deposit

2006

1:400

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2.

FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF

Min $250 Deposit

1974

1:200

Review Trade! Trade!
Terms & conditions apply
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3.

ASIC, FCA, DFSA, SCB, CySEC, BaFin, CMA

Min $200 Deposit

2010

1:500

Review Trade! Trade!
Terms & conditions apply
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
4.

ASIC, CySEC, IFSC, DFSA

Min $5 Deposit

2009

1:888

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.28% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
5.

ASIC, CySEC, FSA

Min $200 Deposit

2007

1:500

Review Trade! Trade!
Terms & conditions apply
Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Why trade Shell stock?

Trading the stock market has become a popular investment activity for many people, especially with the technology that we have these days making it more accessible than ever. There are a vast number of trading brokers, trading platforms and trading apps available for buying and selling Shell stock with relative ease. The cost involved to get started makes trading Shell stock accessible to traders of all experience levels from across the globe.

The availability of leverage has also contributed towards the increase in aspiring traders. Leverage allows traders to hold a position size greater than they would have been able to without it. E.g. An account balance of $1,000, could take a position size of $5,000 with 1:5 leverage. Whilst this can increase potential profits, it also greatly increases risk. It is therefore of the upmost importance that you have a clear understanding of the significant risks involved with online trading, especially when using leveraged positions.

The majority of traders would look to buy and sell Shell stock to try and earn profit from the variation in Shell’s stock price. When trading Shell CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Shell shares. This can make it a more convenient trading method for anyone who has a trading account with an online broker. Alternatively, long term investors may purchase traditional shares in Shell’s stock for a more long-term hold.

Buying Shell stock can also be a way to diversify a trading portfolio and to hedge against shares in other stocks or investments in other asset classes such as forex, commodities, precious metals and cryptocurrencies.

However, before investing in Shell, it is important you understand the dynamics that affect the Shell stock price.

How to trade Shell stock online?

If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Shell stock online. Here is a summary of the key steps:

1.     Decide if trading Shell stock is for you

Trading Shell stock online carries an element of risk and can take more time than other forms of investing. You will need to research the company, manage your positions, follow market news and decide how to react to it. It is important to understand the risks and dedication that comes with trading Shell stock online.

2.     Educate yourself

Before trading Shell stock, it is imperative to learn as much as possible about investing and trading online. Any mistake could prove to be costly. There is an abundance of free educational materials provided by many online brokers that can help you to improve your trading skills and knowledge.

Most brokerages will also provide a free demo trading account so that you can practice trading Shell stock online with virtual funds in order to familiarise yourself with the trading platforms and practice your trading strategies until you feel confident enough to open a real trading account.

3.     Choose a Shell stock broker

In order to trade Shell stock online, you will need a broker account and trading platform to execute your trade positions through to the market. When choosing a broker, there are a few important things to consider such as regulation, commission fees, platforms, tools, education, funding options and customer support.

If you do not have the time to research brokers, you can see a list of our best brokers that we have already prepared to help traders. If you would like to know more, you can also view our detailed guide on how to choose a trading broker.

4.     Research Shell

If you have made it this far then you may be ready to start trading Shell stock online! The next step is to research Shell to help increase your knowledge in the company. The best brokers should have this information conveniently displayed for you within their trading platform.

5.     Have a trading plan

Some of the most important factors that can help determine Shell stock trading performance can be the trading plan and discipline. It is important to have a solid trading plan personalised to your own needs that includes the money management and trading strategy that you will use. Most experts and professional traders would try to not let negative emotions such as fear, anger and greed affect their trading strategy.

6.     Buy and sell Shell stock

Once you feel ready to trade Shell stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Shell, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Shell trades for the long-term, whereas traders may buy and sell Shell stock on a daily basis.

Is trading Shell stock right for me?

Trading Shell stock is a popular choice for long-term investors and active traders. It can be suitable for scalping, day trading and swing trading. Traders who would usually trade forex, trade indices, trade commodities, trade cryptocurrency, may look to diversify their portfolio.

However, it is important to understand the significant risks involved with trading Shell stock online, especially when using leveraged positions. Most experts would suggest trading on a demo account with virtual funds to begin with.

This can be a useful way to familiarise yourself with how to trade Shell stock and using trading platforms whilst allowing you to practice your trading strategies until you feel confident and produce consistent results. Most stock brokers provide unlimited demo accounts free of charge.

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