Shorting TSLA shares can be a profitable trade if you’re right, but it also comes with significant risks. Before you begin trading, be sure you understand the risks and take a conservative position that you can afford to lose. How to Short Tesla Stock.
To short Tesla, you must have a margin account, which is an agreement with a brokerage firm that lets you borrow shares and sell them on the market, hoping to buy them back at a lower price for a profit. This is a highly risky trading strategy, and 51% of retail CFD accounts lose money.
How to Short Tesla Stock: Risks, Rewards, and Strategies
Despite being the most widely shorted stock in the world, Tesla’s demonstrated resilience has crushed many bearish expectations and triggered epic short squeezes. Pocket Option’s forensic analysis reveals that the most financially destructive mistakes in shorting Tesla consistently involve misaligning deteriorating fundamental catalysts with confirming technical breakdowns. This glaring oversight creates a dangerously high risk of catastrophic losses and demands military-grade discipline and mathematically precise risk management protocols.
In addition to direct shorting shares, traders can use options and exchange-traded products (ETPs) to speculate on the price of Tesla shares. Options allow you to leverage your investment with limited downside risk, while ETPs offer additional liquidity and cost efficiency. However, trading these instruments requires knowledge of the underlying asset, fees, and leverage, which can dramatically magnify both potential profits and losses. Regardless of which type of instrument you choose, be prepared to act quickly in response to sudden price movements.