How to Short Tesla Stock (TSLA)
Tesla’s stock is exceptionally volatile, making it challenging for short sellers to make money. This is a result of high trading volumes, strong market sentiment, and news coverage. Additionally, CEO Elon Musk can cause significant price movements with his frequent announcements and social media posts. Those who have attempted to bet against TSLA have lost an estimated $9 billion since the beginning of 2020.
The most successful shorts are those who can find and bet against the company’s overvaluation. However, it’s important to note that short interest can also be influenced by hedges and convertible arbitrage positions. For example, the majority of TSLA’s short balance is the result of hedging activities related to convertible debt. Resource theinvestorscentre.co.uk
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As the most heavily shorted stock in the market, TSLA had investors on edge heading into earnings. While the company’s first quarter results were a bit disappointing, they weren’t wild-card misses that would have forced short sellers to cover their positions.
However, there were some surprises in the results. For example, the Model 3 production ramp is now on track to hit 5,000 cars per week. This is good news for the company, and a potential catalyst to drive the share price higher.