The Tradu Tesla stock trading guide
Understand this large-cap stock and how you can use it to support your trading strategy.
About Tesla
Tesla, Inc. is a US company that designs, builds, sells and leases fully electric vehicles, as well as energy generation and storage systems. It's listed as the 69th largest company in the world on the Forbes 2023 Global 2000 rankings and 71st in the Forbes 2023 Net Zero Leaders rankings.
Now a global leader in electric vehicles, Tesla, Inc. was founded on 1 July 2003 by Jeffrey B. Straubel, Martin Eberhard, Marc Tarpenning and Elon Musk – the latter also currently serving as Tesla's CEO since 2008. The company headquarters is currently located in Austin, Texas, where it moved from Palo Alto, California in 2021.
Tesla stock went public on 29 June 2010 on the NASDAQ Global Select Market under the ticker symbol 'TSLA' at a price of $17.00 per share. On 30 December 2022, it closed on $123.18 per share. Tesla reported a net income of $12.6 billion on revenue of $81.5 billion in 2022.
What affects Tesla stock prices?
As with all assets, Tesla share prices fluctuate across trading sessions. Understanding the main driving forces will help you seize opportunities when timing your entry and exit points. In addition to fundamental factors, there's a mix of external conditions that can influence Tesla stock prices.
- Financial performance: Tesla's financial results such as revenue, income, and delivery numbers significantly impact its stock prices, especially around the quarterly periods when financial reports are published.
- Market demand: As a leading manufacturer of electric vehicles, Tesla stands to benefit from the expected high future demand for electric vehicles as the world moves towards more sustainable transportation.
- Competition: Tesla was once synonymous with electric vehicles but now almost every automaker is transitioning into this space. Only time will tell whether Tesla will maintain its high market share as competition ramps up.
- News: Events and developments relating to Tesla and the EV industry – such as technological advancements or regulatory changes – can affect investor sentiment and, therefore, the price of Tesla shares.
- Leadership: As CEO of Tesla, Elon Musk plays a crucial role in the company's success. His ability to juggle his other responsibilities at SpaceX and Twitter has a major influence on TSLA stock price. And while Elon Musk's reputation helps boost prices, his public actions and statements also represent a significant risk for shareholders.
How to invest in Tesla
There are several methods of investing in Tesla, so you can choose the option that best suits your strategy.
The simplest way is to buy Tesla stock directly. Owning equity lets you capitalise on the company's future profits when it performs well, free from any fixed timescales. You have the flexibility to buy or sell whenever you see an opportunity, whether after days, months or years.
Trading Tesla stock
Another option is to speculate on Tesla stock price movements using financial derivatives such as contracts for difference (CFDs).
These derivatives allow you trade the market in either direction, without owning the underlying asset. They're also leveraged, allowing you to increase your exposure using less capital and amplifying your profits or losses.
Familiarise yourself with these derivatives using our in-depth guides:
Is Tesla stock right for me?
Pros of trading Tesla stock
Traders choose to invest in Tesla stock for a variety of reasons, including the following:
- Volatility: Tesla share prices undergo significant fluctuations, which savvy traders may turn to their advantage.
- Speculate on price movements: You don't need to wait for bull conditions to profit from Tesla stock, as you can speculate on the market in either direction using financial derivatives.
- Amplify your exposure: Trading using leverage up to 1:20 gives you greater exposure from smaller deposits. This frees up capital you can make the most of elsewhere.
- News coverage: As one of the world's most high-profile companies, Tesla's performance and breaking developments are widely documented and covered by the media.
Cons of trading Tesla stock
As with any stock or asset type, there can be downsides to investing in Tesla shares, such as:
- Leverage: Trading on a margin can lead to greater losses just as it can profits. Consider your risk appetite and put appropriate risk-management tools in place before you open any trades.
- Volatility: As discussed, Tesla stock is subject to a variety of factors that can influence its price. Even though thorough research and analysis can help you with risk management, there will always be elements that are out of your control.
- Diversification: While individual stocks can play an important role in your strategy, they have limitations when used in isolation. A well-diversified portfolio includes both large- and small-cap stocks, as well as a mix of other asset classes.
How to start trading Tesla stock with Tradu
- Open your Tradu account today: Enter a few simple details and you could be trading in minutes.
- Choose a strategy: Devise a well-defined trading system based on your goals and risk tolerance.
- Study the market: Refine your understanding of Tesla stock performance using our live price charts, historical data and innovative tools.
- Make your first trade: Enter your first position and use our live price charts to identify the right time to exit.
- Leverage our expertise: Take advantage of our learning resources to broaden your trading skills and leverage our customer support 24/5.
- Diversify: Expand your portfolio across different markets and asset classes, to hedge against risk in any single category.
