Traders who ‘short’ Tesla shares are speculating that the company’s share price will fall. They borrow the shares from a broker and sell them in the market, hoping that they’ll be able to buy them back at a cheaper price and return them for a profit. The difference between the sale and purchase price, plus any brokerage fees, is the trader’s profit. This strategy is popular with investors who are confident that a stock will decline and have a high risk tolerance.
One of the most direct ways to short Tesla shares is to use an equity margin account. You’ll need to apply with a broker that offers this service and meet their criteria. These include a minimum account balance, income requirements, and a tolerance for risk.
Tesla Shorting Strategies UK is to buy put options, which give you the right, but not the obligation, to sell a certain number of shares at a specified price (strike price) within a given time frame. These options are traded on a derivatives platform and offer more flexibility in managing your exposure to volatility.
Tesla is best known for its electric vehicles, but the firm also produces battery energy storage from home to grid-scale and solar roof tiles. It does not pay a dividend and is not subject to US Dividend Tax, but investors in the UK may be liable for CGT or Income Tax, depending on their individual circumstances.