Tesla’s sky-high valuation has been a source of contention, but the company remains the world leader in EV technology and has cultivated a loyal customer base. However, the company faces a number of long-term challenges and competition, and many investors believe the stock has much further to fall.

Tesla Short Selling Guide can make money from a decline in Tesla’s share price by shorting the company’s stock. This involves opening a margin account with a broker, borrowing shares and then selling them for more than you borrowed them for. Then, when Tesla’s stock price falls, you buy back the shares at a lower price and close the position for a profit.

Traditional methods of shorting stocks require a significant upfront investment and are only suitable for sophisticated investors with the ability to manage the risks involved. Thorough research is essential, as a stock’s price movements can be unpredictable. Detailed analysis of market sentiment, technical indicators, and earnings reports can help identify potential price moves.

Elon Musk’s Counteroffensive

In recent years, CEO Elon Musk has waged an open war against short sellers, using social media to mock them and at times directly influence the company’s stock price. This has exacerbated volatility and made it even more difficult to short Tesla stocks successfully.

Another option for shorting Tesla is to use an inverse exchange-traded fund (ETF). These funds track indices that move in the opposite direction of a specific sector or stock. They can be traded like stocks and are usually easier to access than direct shorting Tesla shares. However, these funds can suffer from their own problems. For example, they often suffer from ‘short squeeze’ traps whereby a sudden rise in the stock price forces short sellers to buy back shares and drive the price even higher.