How to short tesla? When it comes to cars, few companies are as well-known or as highly valued as Tesla (TSLA). In fact, the electric car maker is one of the largest by market capitalization and a major force in the world of automotive innovation. But despite the company’s successes, investors are betting that Tesla shares will fall in price. This is why TSLA is among the top 10 most shorted stocks in the US, according to securities lending data firm Hazeltree.
How do you go short on a Tesla?
There are a number of ways to short tesla, including traditional short selling and ETPs (exchange-traded products). Here’s what you need to know about each of these methods.
How to Short Tesla Shares
The process of shorting a stock involves borrowing shares, then selling them in the public market and later buying those same shares back on the open market at a lower price. This difference between the sale and buy price is the trader’s profit. A good Tesla short selling strategy will include extensive research and an understanding of market sentiment.
How to short a tesla
The most common way to short Tesla shares is through a traditional short sale. This involves a brokerage account and requires the ability to borrow shares of the company. However, this method carries unlimited risk and should only be used with a margin account that has sufficient funds to cover potential losses.
When you short a stock, the maximum amount of loss you could face is your initial investment. But if the stock rises instead of falling, you’d need to buy the shares back in order to cover your position, leading to losses that exceed your original investment. This is known as a “margin call” and could lead to your broker forcibly closing your position at a loss.