Tesla (TSLA) is one of the most followed and discussed stocks. This is what happens when you create a new industry (electric vehicles) and negotiate a price range from $100 to $400, and then back to $100, all within a couple of years. And let’s not talk about the rise of Tesla founder Elon Musk on the political front.
All of this would possibly leave investors wondering what is the most productive way to gain exposure to Tesla’s inventory besides buying it outright. This is where the exchange-traded budget can constitute a wide variety of “access points” for other types of objectives. Popular indices such as the S
But in the case of Tesla, we have perhaps the widest diversity of feasible options to “increase” its profits. Here are seven I chose and how you might use them. Please note that those are my own observations and research. These are not recommendations, but just a way to broaden the diversity of what is imaginable for investors who do not delve into this topic as I have for decades. Do your own due diligence before making any investment decisions.
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It is one of 11 SPDR sector ETFs and TSLA is the second-largest consumer discretionary stock after Amazon (AMZN). TLSA currently represents 18% of XLY’s assets. AMZN has 22% and Home Depot (HD) has 8%. Thus, almost part of XLY is in those 3 titles.
XLY has $24. 3 billion in asset control and a low expense ratio of 0. 09%.
I want to own Tesla but with some diversification. This is one of the reasons why my strategy for investing in ETFs is probably very different than most others. I like concentrated budgets because they allow me to focus on a smaller basket of names that are everything I want from that segment of the market. I don’t want a piece of 93 stocks in one sector! This is for investors who prefer to reduce the threat of an individual stock.
The focus of this ETF is long-term growth of capital achieved by investing in companies that benefit from the development of new products and technologies, such as autonomous mobility, intelligent devices, adaptive robotics, neural networks, reusable rockets and advanced batteries. Tesla is ARKQ’s top holding (17% of assets). ARKQ has total assets of $968 million and an expense ratio of 0.75%.
Complement the TSLA exhibit with assignments for defense, cybersecurity, and exploration.
Volatility. The stock has seen a lot of “back and forth” over the past three years, losing 50% and then gaining 100% to break even over that period.
I need to own TSLA and other independent tech stocks, but not Amazon. It’s also a diversification move around Tesla stock, but a thematic organization of stocks rather than just those in the same customer discretionary sector.
It’s TSLA times 2, although it’s not that simple. As with all ETFs that, like this one, use leverage, the concept of knowing double the profit or loss of TSLA alone should be assumed to be smart on a daily basis. Still, when TSLA goes through one of those manic surges, 2x is attractive attention to me. TSLL has an expense ratio of 0. 96%.
“All in” with Tesla, with the possibility of earning twice as much as owning common shares.
What Tesla gets twice as much, it also gets twice as much.
Since I am a chartist at heart, I can buy a smart TSLA chart or buy a smart TSLL chart with part of the assets at risk. This ETF could appeal to those comfortable with leverage, seeking double the gain with double the risk.
Leveraged ETFs are a relatively new creation. Single inverse ETFs have been around since 2006. And that means I’ve been using them liberally for 18 years. The ones that move opposite major market indexes have been a “go-to” for me as an offense-defense investor since prior to the global financial crisis.
Single-share inverse ETFs, like those introduced through Direxion, T-Rex and other fund companies, are newer on the scene. Again, the daily target means that longer periods will not reflect the underlying performance of the “long” stock market. TSLS has an expense ratio of 1. 07%.
Efficient way to essentially “short” TSLA, on a 1:1 daily basis.
Investors tend to undereducate themselves on the “math of investment loss.” In other words, if TSLA goes up 20% as it has done in short time periods many times, this would drop approximately 20%. But that means you need to make 25% just to get back to even, not 20%.
When I think TSLA is overpriced short-to-intermediate term, and want to try to profit from a potential decline of some magnitude. TSLS could appeal to those who wish to try to profit from a decline in TSLA. Note that big “round trip” move I noted at the start of this article.
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This fund takes the 2x concepts, invests them and combines them. It would not have worked well if he had taken a position in 2024. But don’t let this recap of the full year fool you. In its first full year of existence, TSLZ experienced month-long increases. 80%, 50% and 30%. These are tactical vehicles, period.
Potentially a “cleaner” way to try to capitalize on declines in Tesla stock than using put options. That’s because TSLA is so volatile, buying options can be very expensive.
I own TSLA but am concerned about its near-term price picture, so I can consider this to hedge some of that, and try to avoid the full downside risk. Or, I can use this to try to profit from the next major dip in TSLA. For those who don’t just think the stock will fall, but do so quickly, this ETF, like other inverse funds, aims to be held for short time periods.
This is another in the series of YieldMax ETFs that I recently wrote about here. TSLY aims to generate a very significant source of income and an overall return of approximately 80% of the ups and downs of TSLA stock. TSLY has total assets of $1 billion and an expense ratio of 1. 0%.
The gigantic revenue payout source aims to capture roughly 80% of TSLA’s upward moves overall.
Tends to track about 80% of the downside in the stock.
Bullish on TSLA but prefer to earn more of my total return as income, with some upside potential beyond that. This relatively new ETF might appeal to those who want to ride along with Tesla, but exchange some potential capital appreciation for current income.
Finally, another from YieldMax, but which moves away from its main product line. This fund, which has an expense ratio of 0. 99%, is listed in May, so I will use it directly from the fund’s holding company:
The YieldMax Short TSLA Option Income Strategy ETF is an actively controlled ETF that seeks to generate a monthly income stream from an artificial covered put strategy on TSLA, while also providing oblique short exposure to the value of TSLA inventory. Array CRSH seeks to profit from a decline in the value of TSLA’s stock, however, the corresponding possibility of profit for CRSH from a decline in the value of TSLA’s stock is limited. CRSH seeks to manage potential losses (i. e. , limit losses if TSLA stock reports significant gains) by purchasing OTM call options.
Great income.
This brand new ETF is only for the very bold, and who are bearish on Tesla stock. It produces a high income level, but declined more than 40% of its price during its first six months in existence.
The good news about TSLA: it has more than doubled since last spring. The bad news about TSLA: this giant move brought it back to the level where it was trading about 3 years ago. I’m not a fan of “dead money” (old Wall Street term), especially when it comes to a political football, which was previously halfway to a meme inventory, even if its founder is discovered in a quasi- potentially influential. government position. There is a lot going on here, and this story is much more complex than many options I could make the decision to invest my money in.
Knowing that these ETFs exist is step one. Understanding them is step two. Determining how to use them, when to use them and how to avoid getting burned from anything related to Tesla’s volatile underlying stock price movement is all part of the “next level” of learning how to design portfolios for modern markets.
Disclosure: I own some of the funds mentioned in this article.
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