How to short Tesla shares is a complex topic that requires proper preparation, the right resources, and a thorough understanding of the risks and rewards. This article outlines a step-by-step process for shorting stocks, including an in-depth look at how to do it using contracts for difference (CFDs), which leverage underlying assets and multiply potential profits and losses.

Elon Musk’s EV company has been on quite a ride since the election, and investors might be wondering how to play it in the near-term. The stock has been rising on the back of strong EV demand and the excitement surrounding the robotaxi, though some analysts are concerned that the company’s financials might take a hit if it starts discounting heavily to keep up with market competition.

How to Short Tesla Shares: Profit from Price Drops

The TSLA share price fell sharply on Monday after President Trump said he would end tax credits for new electric vehicles. While the market sell-off was broad, TSLA was among the hardest-hit stocks, and its shares dropped 15.4% on the day.

TSLA’s short interest is a key metric to watch. It indicates how many of the company’s shares have been sold short, and it can be an indication of investor sentiment. A low short interest ratio can signal positive investor confidence, while a high one can indicate pessimism.

The easiest way to short TSLA is by opening a margin account with a broker that supports short selling. Then, you can borrow shares to sell in the open market, and you can buy those shares back later at a lower price to make money. Another option is to trade exchange-traded products (ETPs), such as the Direxion Daily TSLA Bull 2X Shares and the Direxion Daily TSLA Bear 1X Shares, which seek a 200% or 100% daily investment return of the inverse (or opposite) performance of TSLA stock.