How to invest in Tesla - From buying to shorting its stock

How to invest in Tesla - From buying to shorting its stock

Tesla's stock price grew more than 700% in 2020, followed by 70% growth in 2021. You can only imagine if you were investing in Tesla stocks how much you would have gained, don’t worry it is probably not too late for you to join the club.

The company managed to outperform its projections amid a global shortage of microchips and a struggling supply chain in the US, which makes investors believe that Tesla stocks are still exciting.

Investors have always believed that the surging trend is a good opportunity for short selling, while other investors believe that Tesla is approaching another upward trend with the increasing trend for electric vehicles.

Whether you plan to short tesla stocks or to hold Tesla stock for a longer period of time, we have put together the steps that you need to follow if you want to start trading Tesla.

Look for the Proper Broker


Tesla stock is traded on the NASDAQ stock exchange under the ticker “TSLA”.

In order to get yourself trading with the company's stocks, you need to get access to the market, and unless you are a broker yourself, you need to find a broker that can do that for you. Brokerage companies work with investors to enable them to trade on different markets, using different instruments.

The internet is packed with financial brokers that will appear on any Google search, but not every broker is reliable. That being said, you need to be careful because there is a multitude of scam brokers out there.

The most important thing to do is to check the license of the broker, do not sign up with any broker that is not backed by a license. Even when the broker holds a license, a simple inspection of the license will give you an idea of whether the broker is reliable or not.

Another thing you need to keep in mind is the broker's payment methods. Check how you are going to add funds to your account, and if these methods are available in your country. You also want to ensure that stock trading is available at the broker’s website, and specifically that Tesla stocks are available otherwise, there is no point in registering with this broker.

Finally, check the commissions and fees that are charged by the broker. You definitely don’t want to pay all your gains to the broker in the form of deposit fees, trading commissions, and withdrawal fees.

To get you started, we have listed some of the top brokers that we believe you can trade with securely and successfully:

Broker 14$  
Broker 25$  
Broker 34$  
Broker 45$  
Broker 54$  

Sign Up With the Broker


Once you have found a broker that will allow you to buy Tesla stock, you need to open a trading account. This account will be your trading wallet where you will transfer your investment capital to and from where you are going to buy Tesla stocks.

The signup process is very easy and will take a few minutes. You need to provide your personal information, then verify it using either a verification email or you will receive a code on your phone.

As a matter of identity verification, you will be asked to submit other documents, including proof of identity such as an ID card, or driving license, as well as proof of address such as a recent utility bill. This is nothing to worry about, it is just for the sake of keeping the trading platforms free from any blacklisted accounts, or financial scams.

Start Depositing in Your Trading Account


After getting your profile verified, you can invest in Tesla by adding money to your trading account. There are several ways to add funds to your account. Usually, they are indicated in “Payment methods” on the broker’s website, where the payment means, processing time, fees, and limits are will be specified.

Depending on your country of residence and the acceptable payment methods that the broker accepts, there might be a few different payment options available to you. Usually, credit/debit cards are accepted by every brokerage.

However, for some traders, e-wallets are preferred since you do not have to provide your banking information to a third-party company. In addition to that, e-wallets are faster and mostly charge lower fees.

While making your deposit, there is usually a minimum deposit required by the broker. That shouldn't worry you too much because the Tesla stock price is usually higher than the minimum deposit amount. But it is good to know the minimum deposit limit. Most brokers require at least $200 for the first-time deposit, as well as some minimums for further deposits.

It might take some time for the amount to show on your trading account, depending on the method you used for the deposit. Using a credit/debit card or e-wallet is usually the fastest, and processing time can be from instant to 2 business days. However, if you decide to go with a wire transfer, then you will need to wait for up to 7 business days.

Once your deposit is shown in your account it is time for you to decide whether you want to buy Tesla stock or short it. It all depends on your aim and trading strategy.

Trading Tesla Stocks


Based on the stock activity of Tesla, there are one of two ways that you can play it. If the stock is going up and you are projecting that the stock price will increase, then you buy Tesla stocks and hold.

However, if you see that an upward trend is going to slump at some point in the near future, then you need to know how to short the stock.

Buying Tesla stock

Some investors believe that Tesla stocks are worth buying for long-term gains. The sales growth that the company witnessed over the last 3 years, caused some investors to believe that Tesla's CEO, Elon Musk, is not going to keep pushing for further growth.

The stock price in 2019 went from roughly $22 to around $28. 2020 witnessed a huge 700% increase in the stock price with investors gaining phenomenally.

The stock price slowed down a bit in its growth rate in 2021, as it went from $230-ish to over $400. This by itself is considered an achievement, given the supply chain shortage in the US. This was followed by a rough year for the entire tech world and Tesla was no exception. By September 2022 the stock price had dropped to around $220 per share and it seems that the company is currently on a downtrend.

So, even if you don’t know how to invest in stocks, the process of getting started is fairly straightforward. Once your account is up and running and you have added some funds to your account, you only need to go to the products available on the trading platform, select TSLA from the stocks, enter the amount of stock you are going to buy, and open your trading position in the market.

If you believe the current price or the trend direction is not ideal for you to enter the market, and if you want to wait until the stock reaches a specific price, you can select a “buy option”.

The buy option will allow you to automatically buy an asset when the stock reaches a certain price point.

Short selling

Other types of investors believe that Tesla is a good short-selling option, let’s explain what short selling is briefly.

Short selling is an advanced technique used by experienced traders. It is based on speculations that the stock price will fall in the near future, and you make a profit if the prediction is correct.

To short Tesla stocks, you do exactly what you would do when buying it but instead of selecting "buy", you choose "sell".

Basically, you are predicting that the stock price will go down. It is the opposite of a buy order in that sense. If you short the stock, you make more money the further the stock price goes down.

This approach is taken by investors who believe that Tesla’s stock price has grown enough and is going to drop at a certain point. Generally, this strategy can be risky, especially with a versatile company like Tesla that grows unexpectedly. However, there are cases where such a strategy can be very profitable, such as the GME short.

Is Tesla a Good Stock to Buy?


Tesla's stock price has been one of the most exciting stocks to watch over the last couple of years. The stock price grew from $12.34 in May 2019 to $407.34 in November of 2021. At the moment it is sitting at around $220 per share, but many investors are still bullish as all tech stocks are currently in a slump.

There are still many technological advancements that the company might be introducing soon, not only in the promotion of electric vehicles and self-driving cars but also robotics. So there could be some potential for gains over the long term.

As the world is facing high-interest rates, high inflation numbers, and a potential recession, the company might simply be down due to these factors.

The hope of Tesla finally fulfilling its dreams of fully self-driving automobiles could bolster the stock price. But this is something that Musk has promised since 2017 and seems to still be many years from becoming a reality.

Another reason some investors think that short selling is the way to go is that Elon Musk recently sold off large chunks of his Tesla holding to purchase Twitter.

Something else that makes some investors careful of Tesla's stock growth, is that electric vehicle production is highly competitive in Europe and China. For example, Volkswagen has already sold 209,000 EVs in Europe in 2021, and this number is expected to increase by the end of 2022, making it the highest EV provider on the continent, so Tesla is going to face fierce competition in its Berlin Gigafactory. While China has seen several electric vehicle companies making a play in both EV and self-driving markets with great success.

Short sellers believe these factors are going to stagnate the Tesla stock price and will keep going down, which could make for a great opportunity to short the stock.

FAQ About Buying Tesla stocks

Can I invest in Tesla stock for $1?

Yes. But to do so you will need to make sure your broker allows fractional share trading. This allows you to buy a fraction of a Tesla share for $1. Not all brokers offer fractional stock trading, but it is getting more and more common, especially since some stocks are expensive and not all traders can afford the price of 1 stock.

Can you short Tesla shares?

Yes, you can. If you believe that the stock price is going to drop in the near future it is the best way to trade the stock. You need to make sure that the broker offers TSLA stock trading, and that it allows you to short the stock.

How to buy Tesla stock directly?

Tesla stocks are traded on the NASDAQ stock exchange. In order to access the market, you need to open a trading account. Make sure the broker is licensed because you are going to trust the broker with your investment capital.

Is Tesla stock a good investment?

Maybe, maybe not. Currently, the company is under criminal investigation by the U.S. Department of Justice over claims that Teslas vehicles can drive themselves. This along with The CEO, Elon Musk, selling off large amounts of stock to pay for his buyout of Twitter has spooked many investors. It would be better to watch what happens in with all the news before deciding to buy into the company.