Tesla Trading, Inc. TSLA It can always be said that it is an adventure. The stock remains highly volatile, with a beta* of 2.11, making it twice the responsiveness of the market as a whole.
Tesla is at the top of the emerging electric car industry and is now facing stiff competition from emerging companies such as Rivian Automotive Inc. countryside And the Pole Star PSNYWestablished traditional automakers such as Ford Motor Company FAnd the General Motors Corporation GMAnd the Honda Motor Company Hamad Medical Corporation And the Toyota Motor Corporation. TMas well as overseas competitors such as NIO Inc. NIO And the Xpeng Inc. XPEV.
Tesla’s rise to the top of several leading stock market indices, such as the NASDAQ 100, put it squarely in the goals of both individual and institutional investors. It remains one of the most traded – and short-sold – stocks on US stock exchanges, with strong options volume.
Elon Musk, Tesla’s eccentric CEO, still manages to drive retail investors crazy with memes, outlandish ideas and high-profile controversies like his current lawsuit with Twitter Inc. TWTR on potential acquisition.
Bottom line, for bulls and bears alike, there can be ample trading opportunities due to the volatility of the stock and the interest it receives. The question is: What catalysts can Tesla traders look forward to for the remainder of 2022? And how can they better trade around them?
Earning motivators to watch for
Volume and volatility in Tesla tend to be higher around its quarterly earnings reports, with the most recent occurring on July 20 for the second quarter of 2022. Tesla is then expected to announce its third-quarter earnings report between October 19 and 24.
As the earnings report date approaches, key numbers to watch and compare against consensus analyst estimates could include:
- Ongoing effects of inflation and supply chain constraints on gross margins for the automotive sector (largest source of revenue) by comparing quarterly growth/contraction year on year.
- Whether Tesla’s new Gigafactory plant in Austin, Texas will exceed the expected 1,000-week vehicle production estimate set by management.
- The rate of growth of its infrastructure – particularly the potential increases in the number of stores, service centers and supercharger locations.
- dispose of her remaining 25% of bitcoin Bitcoin / US Dollar After selling 75% at the end of the second quarter.
Tesla shareholders also approved a 3-for-1 stock futures split on Thursday, August 4th based on a preliminary vote count. Back in 2020, stocks surged in the weeks after Tesla last made a 5-for-1 stock split. Traders may be able to take advantage of increased volatility in the coming weeks as investors snap up Tesla shares in anticipation of the split date.
Macroeconomic factors to watch
As a stock of growth, Tesla is likely to be affected by inflation and rising rates, which could lower its valuation and increase the borrowing cost of capital. Key dates to watch before Tesla’s October earnings report include:
- The Consumer Price Index (CPI) numbers for August and September will be released on September 13 and October 13, respectively.
- The Federal Open Market Committee (FOMC) meets September 20-21. Chairman Jerome Powell has raised the possibility of a third consecutive rate hike of 75 basis points, with the fed funds rate target from 3.25% to 3.5% by the end of year 2.
Earlier in July, Musk lamented the effects of prolonged high inflation on Tesla’s expenditures and sales prices, noting that the new plants in Austin, Texas and Brandenburg, Germany, were “huge money furnaces.”
Higher prices for raw materials, particularly semiconductors, were cited as a major impact on Tesla’s lower margins. Merchants can therefore monitor the PPI by industry, with the manufacture of semiconductors and other electronic components as a possible leading indicator of the Tesla 3 outlook.
Trade Tesla with Direxion ETFs
Traders looking for extensive exposure to Tesla can use Direxion’s pool of TSLA Bull 1.5X (TSLL) and Daily TSLA Bear 1X Shares (TSLS) in place of margin or options.
TSLL seeks daily investment results, before fees and expenses, at 150% of one-day TSLA performance, and TSLS seeks daily investment results, before fees and expenses, at 100% of reversing one-time TSLA performance. day. It is important to note that funds are not invested directly in TSLA. Traders with a bullish view can buy the TSLL to buy if they believe that the TSLA will rise. Conversely, traders with a bearish view can buy TSLS to sell if they believe that TSLA will go down.
A strategy that uses TSLL or TSLS to trade around the next TSLA earnings report or economic releases can be a way to speculate on upward price action or hedge against deflation. As with all leveraged ETFs, TSLL and TSLS can be a powerful way to achieve short-term exposure but only if traders do their due diligence on TSLA’s short-term outlook, have a solid investment thesis and have a high risk tolerance.
Beta describes how the expected return for a stock or portfolio is related to the return on the financial market as a whole. A beta greater than 1.00 indicates that the portfolio is more volatile than the market, and a beta less than 1.00 indicates that the portfolio is less volatile than the market.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investing in funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, leveraged and/or inverse ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification.
Leveraged and inverse ETFs pursue daily leveraged investment goals which means they are riskier than non-leveraged alternatives. They pursue daily goals and should not be expected to track the performance of the underlying stocks over periods longer than one day. It is not suitable for all investors and should only be used by investors who understand the risks of leverage and who actively manage their investments. Funds will lose money if the underlying stock’s performance is flat, and funds can lose money even if the underlying stock’s performance increases over a period longer than one day.
The investor should carefully study the fund’s investment objective, risks, costs and expenses before investing. The fund’s prospectus and summary prospectus contain this and other information about Direxion stock. To obtain the fund’s prospectus and summary prospectus, call 866-476-7523 or visit our website at direxion.com. The prospectus of a fund and its summary prospectus should be read carefully before investing.
TSLA Trading Risk – The TSLA trading price has been very volatile and could continue to experience wide fluctuations in response to various factors. The stock market in general, and the technology companies market in particular, experienced extreme fluctuations in prices and volumes that were often unrelated or disproportionate to the operational performance of those companies.
Tesla Risk: The future growth and success of Tesla, Inc. on consumer demand for electric vehicles, and specifically, their vehicles in the automotive industry that is generally competitive, cyclical, and volatile. If the electric vehicle market in general and Tesla, Inc. As Tesla, Inc. expects. or develop more slowly than you expect, or if demand for its vehicles declines in our markets or our vehicles compete with each other, Tesla, Inc.’s business, outlook, financial condition, and operating results may be affected. Tesla, Inc. may fail. in meeting its publicly stated guidelines or other expectations about its business, which could cause the price of TSLA to fall significantly.
Dirksion shares the risks Investing in each fund involves risks, including the potential loss of capital. Each fund is not diversified and includes the risks associated with a fund that focuses its investments in a particular security, industry, sector or geographic area, which may increase volatility. The use of derivatives such as futures and swaps is subject to market risk that may cause their prices to fluctuate over time. Funds risks include compounding effects, market volatility risk, leveraged risk, derivative risk, counterparty risk, rebalancing risk, intraday investment risk, daily correlation/tracking risk, Tesla investment risk, individual security risk, market risk, investment risk Indirect, discontinuation risks, and risks specific to the consumer discretionary sector, electric and self-driving car companies, and automobile companies. Additional risks, for Direxion Daily TSLA Bear 1X shares, include risks related to short selling and cash transactions. Please see the summary and the full prospectus for a more complete description of these and other fund risks.
Distributor: Foreside Fund Services, LLC.
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