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How to Short Tesla Stock

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Tesla (TSLA) is the largest car maker in the world by market capitalisation, bigger than the combined market cap of Toyota, Mercedes, Volkswagen and GM. Recently the company has undergone some serious turbulence with shares crashing over 30% since the middle of September and over 45% since its peak in November 2021. This has left many investors scratching their heads why they have not shorted the overpriced EV manufacturer in the first place?

What is short selling?

  • A trader opens a short position by borrowing shares from a broker, planning to buy it back later at a lower price. Shares must be borrowed because you cannot sell shares that do not exist.
  • To close the position, a trader buys back the shares on the market and returns them to the lender/broker.
  • Short sellers bet on, and profit from, a drop in a security’s price. This can be contrasted with long investors who want the price to go up.

Now, that you know what shorting is, let’s explore how it can be done.

What are the ways of shorting Tesla:

Shorting the stock outright

This is the most common option, but investors need to qualify for a margin account, be approved by a broker and deposit a certain sum of money* to be able to borrow and short shares of Tesla. This is also risky, as losses are hypothetically unlimited if the price of Tesla continually rises.

Derivatives

Another way of getting short exposure to Tesla stock is using complex financial instruments such as options, warrants, futures, and CFDs.

They are popular instruments among investors but come with their own share of complexities.

ETP

Last, but not least, investors can use buy Inverse (aka “Short”) Tesla ETPs to profit from declines in the underlying shares.

What are the Benefits of using ETPs

Benefits of ETPs over options, futures and other alternative are summarised here:

Trading „Short & Leveraged ETPs“, provides investors with the following benefits:

  • No need for a margin account, invest from just 1 ETP share
  • Losses are capped at the amount invested
  • Traded in multiple currencies
  • Constant leverage factor

Tesla stock is down 30.06% in the last 3 months, in stark contrast with our -1x, -2x, -3x Tesla ETPs, which are up +28.74%, +55.04% and +75.25% respectively.

Trade Short & Leveraged TESLA ETPs with Leverage Shares

Leverage Shares provides a range of Short & Leveraged Single-Stock ETPs that enable investors to take a short position on Tesla.

These products can be traded like any other stock or ETF via a normal brokerage account.

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Violeta Todorova

Senior Research

Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.

Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.

Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.

Julian Manoilov

Marketing Lead

Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.

Oktay Kavrak

Head of Communications and Strategy

Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.

È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.

Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.

Sandeep Rao

Research
Sandeep è entrato a far parte di Leverage Shares nel settembre 2020. È responsabile della ricerca sulle linee di prodotto esistenti e nuove, su asset class e strategie, con particolare riguardo all’analisi degli eventi attuali ed i loro sviluppi. Sandeep ha una lunga esperienza nei mercati finanziari. Iniziata in un hedge fund di Chicago come ingegnere finanziario, la sua carriera è proseguita in numerose società ed organizzazioni, nel corso di 8 anni – da Barclays (Capital’s Prime Services Division) al più recente Index Research Team di Nasdaq. Sandeep detiene un M.S. in Finanza ed un MBA all’Illinois Institute of Technology di Chicago.

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