What is Tesla
Tesla is an innovative automobile and energy corporation founded in 2003 with the purpose of speeding up the world's transition to sustainable energy.
Moving toward a zero-emission future, the company focuses on electric vehicle manufacturing and has proven that electric vehicles may be better and faster than traditional gasoline vehicles.
Tesla produces clean energy generation and storage products in addition to electric vehicles.
Tesla has various manufacturing and assembly factories, including Gigafactory 1 in Reno, Nevada, Gigafactory 3 in Shanghai, and the Tesla Factory in Fremont, California, all of which are headquartered in Palo Alto, California.
Tesla sells the Model X, Model S, Model Y, and Model 3 cars, as well as the Powerpack, Megapack, and Powerwall batteries, solar roof tiles, solar panels, and other related products.
Tesla is a publicly traded company, making its stock available to anyone of legal age interested in purchasing shares.
What are Tesla Shares (TSLA)
Tesla shares represent a unit of ownership in Tesla Motors Inc. – and they are among the world’s most popular financial instruments. Tesla shares will rise and fall in value according to how well the company is performing at a given moment in time. Better-than-expected earnings will make Tesla share prices rise, while weaker earnings will make share prices fall. However, there are many reasons why a company's share price can change.
People trade Tesla shares because, just like other financial instruments, they can be an opportunity to invest money. At a basic level, you can take a position on Tesla shares to get exposure to economic growth. If an economy is in good shape, you might find that companies operating in a specific economic branch or industry will grow too.
Company growth is correlated with share price increases, which is what people are hoping for when they buy Tesla shares.
The corporation raised $226 million by selling 13.3 million shares of common stock at $17.00 each with an initial public offering (IPO) on NASDAQ. Tesla the first American automotive company to do so since Ford Motor Company in 1956.
Tesla reached a valuation of $206 billion in July 2020, surpassing Toyota's $202 billion to become the world's most valuable automaker by market capitalization.
Tesla stock is traded on the Nasdaq stock exchange under the TSLA ticker.
If all that makes you want in on Tesla’s electrifying growth, here is everything you need to know to buy Tesla stock & shares to invest in TSLA.
How to Buy Tesla Shares
Learning how to buy shares may sound complicated, but you will need to do some research — and learn the basics — before making your first investment.
- Learn the difference between investing and trading
- Review Tesla’s performance and outlook 2022
- Understand the risks and charges
- Choose your trading platform and place your orders
- Stay up to date with the latest news and rumours about Tesla
1. Learn the difference between investing and trading
People have two options to buy shares of stock online. Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, you can buy Tesla stock on the NASDAQ exchange, so you own a share in the company (investor). Alternatively, they can buy Tesla shares without owning them, speculating on the price of the underlying asset (trader).
Investing and trading are similar terms that some people will sometimes use interchangeably – but there are significant differences for you to be aware of.
Investing in Tesla Stock
Investors buy Tesla shares hoping their price will rise and they can sell them later for a profit, adhering to the basic principle of buying low and selling high. Investors will take positions over a longer period, attempting to profit from share price changes as well as dividend payments.
While this means that they might need more initial capital to get started when compared to trading, their losses would be capped at this initial price tag. That said, investors should be aware they might get back less returns than they initially invested.
Investors will buy Tesla shares to:
- Make a profit from the Tesla share price rising
- Receive an income from dividends if the company pays them
- Benefit from the effects of compounding
This last point requires investors to hold onto their shares for an extended period. That’s why you’ll sometimes hear the phrase ”time in the markets is better than timing the markets” when talking about share investments.
>> Learn how to invest in stocks
Tesla (or any single stock, for that matter) can be a very volatile investment. You can lower the risk by diversifying your investment holdings.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund provides a broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
TSLA currently makes up about 1.69% of the S&P 500, meaning 1.69% of each dollar you invest in an S&P 500 index fund goes to Tesla. If you want an index with an even larger TSLA representation, you might consider investing in a Nasdaq index fund, where Tesla accounts for 6% of holdings.
Automotive exchange-traded funds (ETFs) provide exposure to the performance of companies within the global automobile industry.
TSLA makes up 19.72% of XLY (Consumer Discretionary Select Sector SPDR Fund), 18.2% of CARZ (First Trust NASDAQ Global Auto Index Fund), 16.6% of SMOG (VanEck Low Carbon Energy ETF), 16.0% of QCLN (First Trust NASDAQ Clean Edge G).
>> Learn what ETFs are and how do they work
Trading Tesla CFDs
On the other hand, traders might seek to capitalize on short-term share price gains. Rather than investing in the shares, traders speculate on the shares’ value. They can speculate on it rising by going long, as well as falling by going short.
Trading Tesla stock means that you are speculating on a share’s price movements with derivatives like CFDs. In other words, you are purchasing Tesla shares without taking direct ownership.
Leverage is available when you use this product, giving you full market exposure for an initial deposit – known as margin – to open your position.
For example, a trader who wanted to buy 100 Tesla shares CFD at $750 per share would only require $15,000 of trading capital, thereby leaving the remaining $60,000 available for additional trades.
But keep in mind that leverage can increase both your profits and your losses as they will be based on the full exposure of the trade, not just the margin requirement needed to open it. This means losses, as well as profits, could far exceed your margin.
With CFDs, you can ‘buy’ (go long) the shares if you think the Tesla stock’s price will rise, or you can ‘sell’ (go short) if you think the Tesla stock’s price will fall.
>> Learn what is CFD trading and how it works
Going Long Tesla CFD
Tesla has a sell price of $749.80 and a buy price of $750.00.
Tesla’s next earnings announcement is fast approaching, and you expect it to be good news. You think the company’s share price will go up, so you buy 200 Tesla shares CFD at $750.00. This is the equivalent of buying 200 Tesla shares.
Because in CFD trading you can use leverage, you do not need to put up the full value of Tesla shares. Instead, you only need to cover the margin, which is calculated by multiplying your exposure with the margin factor for the market you are trading.
So, if Tesla has a margin factor of 20%, your margin would be 20% of the total exposure of your trade (200 share CFDs x $750 = $150.000), which is $30.000.
If your prediction is correct:
When Tesla announces its results, it is clear the company had a successful quarter – and as you had predicted, its share price climbs. You decide to close your position when it reaches $800, with a buy price of $800.20 and a sell price of $800.00
You reverse your trade to close a position, so you sell your 200 CFDs for $800.00.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size. $800.00 – $750.00 = $50, which you multiply by 200 CFDs to get a profit of $10.000.
If your prediction is wrong:
Tesla’s results are worse than expected, and its share price immediately falls. You decide to cut your losses and sell your 200 CFDs at $740.00.
Your position has moved $10 against you, meaning you make a loss of $2000.
Going Short Tesla CFD
Shorting with derivatives can be an effective way to protect your investments against downward price movements in your non-leveraged investment portfolio. Also, it can be a way to generate profits outright from shares that are falling in value. But when you go short, your potential losses are theoretically uncapped because there is no limit on how high a company’s share price can rise.
Here is an example:
Suppose Tesla shares are currently trading with a sell price of $782.00, and you think the price will go down. So, you decide to open a short CFD position on 100 Tesla shares CFD. A week later, the buy price reaches $732.00, and you close your position. This means you made $5.000 in profit ([782.00 - 732.00] x 100 = $5.000), excluding additional costs.
If the price rises, you register a loss. For example, if Tesla shares rose to a price of $800, you would make a $1.800 loss instead, excluding additional costs.
When you create a trading account with CAPEX, you will be able to:
- ‘Buy’ (go long) or ‘sell’ (go short) Tesla and other 2,000 international shares to speculate on their price rising or falling
- Take a position on our range of ETFs to get exposure to a basket of shares from an entire country, index or sector that could be rising or falling in price.
- Trade a host of global indices – including the S&P 500, the famous technology index NASDAQ 100, the Dow Jones Industrial Average (Wall Street) and the DAX (Germany 40) – to go long or short on the performance of an entire economy with a single trade.
- Use QuantX, the smart portfolio builder that helps you cover the popular industries and only invest in the top performing stocks.
2. Review Tesla’s Performance and Outlook 2022
Before buying Tesla stock—or any stock (see our guide on how to buy shares)—it’s wise to do some research into the company’s financials, performance, and outlook. The easiest place to get started is through a company’s annual reports and quarterly reports. Public companies like TSLA are required to publicize detailed information about their financial health in these.
You can find these on Tesla’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.
You may also turn to experts for their input. Brokerage companies frequently release commentary on major stocks and industries, and third-party evaluators like Trading Central provide comprehensive technical and fundamental analysis.
When you combine financial data with expert insight, you will be able to decide how much of your money you want to put into Tesla stock.
Before you load up the trunk with Tesla shares, pop open the hood and see what you are really getting into. Remember, when you buy Tesla stock, you are purchasing a small portion of an actual business:
TESLA INC. designs, develops, manufactures, leases and sells electric vehicles, and energy generation and storage systems in the United States and internationally.
Tesla's balance sheet, income statement, competition, and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.
You can access research, analyst ratings and other key information about Tesla via your brokerage account or a financial information website. If you like what you see, your next step is to consider whether Tesla fits into your current investment portfolio.
- Tesla's market capitalization is $900.6 B
- Tesla's upward move is 116.3% in 1 year
- Earnings per share (EPS) were up 550.7% and are forecast to grow 31.74% per year.
The company reported a strong third quarter with improved earning revenues and profit margins.
- Revenue 3Q USD 13.8 B, up 57% from 3Q 2020
- Net income 3Q USD 1.62 B, up 439% from 3Q 2020
- Profit margin 3Q 12%, up from 3.4% in 3Q 2020
Over the last 3 years on average, earnings per share (EPS) have increased by 124% per year but the company’s share price has increased by 142% per year, which means it is tracking significantly ahead of earnings growth.
Price to earnings ratio (PER) is 259,69, clearly overvalued over 280,3%. Fair value according to valuation is around 239$.
*Last update: November 2021. Source: Yahoo Finance.
Tesla Chart Price
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the technical indicators that a trader chooses to utilize.
Our web-trading platform, for example, offers 6 chart types (including the famous Japanese candlestick chart) to help you analyze price performance across different timeframes. It also enables you to deal in an instant – directly from the charts. You will be able to open, close and edit positions in just a couple of clicks.
Trading charts always feature distinct patterns that technical analyst can use to interpret the behaviour of buyers and sellers. These chart patterns can give traders an indication of where the market could go next. As you will notice when you look at a chart, the market will usually move in one overall direction or trend. There are three types of market trends: uptrends, downtrends, and sideways trends.
From a technical perspective, after a period of wide-ranging movement from March to September 2021, Tesla stock has taken off strongly to the upside, driven largely by the better results published in the third quarter, until reaching new ones without finding levels of immediate resistance.
On the daily chart RSI it is at overbought levels but showing no signs of divergence or exhaustion.
To buy Tesla shares or not?
It is recommended to watch for stocks in the major long-term support area. We should buy Tesla shares at relatively cheap prices (compared to historical values), not expensive prices. Also, have an exit plan for how you will exit a profitable trade. Define how and why you will exit. Since we used to support to get into the trade, you may consider exiting just below a long-term resistance level.
If buying at support, and planning to exit just below resistance, the upside potential should outweigh the downside risk by at least 2:1 or even 3:1. That means that if you buy Tesla shares at $850, you should be reasonably able to get out of the stock at $750 or higher. In the absolute worst case, you lose $100 a share, but based on the historical chart it is quite feasible to go up $200/share or more. This is known as the risk/reward ratio, a key indicator when deciding to buy Tesla shares or not.
With CAPEX WebTrader, you can perform an in-depth analysis of the charts with 90 indicators (including moving average, MACD, RSI and Bollinger Bands). The platform also supports an interactive trading activity with high-end research tools helping you interpret market data.
3. Understand the risks and charges
Trading can be seen as riskier than investing due to leverage. But investing also carries a risk – and there is no guarantee that your investments would increase in value, so you could receive back less than you initially invested.
Before deciding to trade in shares, you should take steps to manage your risk. We have courses at CAPEX Academy that take you through risk management and how to mitigate your exposure to risk in the financial markets.
Our costs and charges for trading vary depending on the product that you use to take a position.
Tesla (TSLA) CFD Trading Conditions
|SPREAD PER UNIT||0.38 pips||LEVERAGE||1:5|
|OVERNIGHT ROLLOVER - LONG||-0.0076 %||OVERNIGHT ROLLOVER - SHORT||-0.0063 %|
|INITIAL MARGIN||20.0000 %||MAINTENANCE MARGIN||10.0000 %|
- Spread represents the difference between ASK price and BID price.
- Future Rollover adjustment consists of the difference in price between expiring contract and new contract as well as the spread of the CFD.
- Swap is the amount credited to or debited from an account where positions are held overnight.
- Inactivity fee represents the monthly amount deducted if no activity is recorded for 12 months in an account.
4. Choose your trading platform and place your orders
To buy Tesla shares CFD with CAPEX Webtrader is very easy and intuitive. Opening an online trading account is as easy as setting up a bank account. Here are the steps:
Open an account or log in
First, create an account or log in on capex.com. To open an account, click the "Register"button and complete your details.
Once the platform is accessed, the registration process must be completed in order to operate with real money. Click "Complete the Registration and Start Trading".
To log in, from the CAPEX website, click on "Login".
Deposit funds into your account
To trade with a live account, it is necessary to deposit funds. This is done from the platform itself by clicking on the "Add funds" button:
Also, it is possible to trade on a risk-free demo account with a balance of € 50,000, which is ideal for getting to know the platform and testing trading strategies.
CAPEX offers you different payment methods: debit cards, credit cards, bank transfer, skrill, and more.
It is noteworthy that CAPEX does not charge any fees or commissions for depositing funds.
Look for Tesla shares
To view Tesla shares (TSLA) real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Shares" and then select the instrument, in this case, TESLA.
Use the indicators and drawings to analyze the chart
Click the indicators icon and select your favorite ones. There are trend-following, oscillators, volatility and support/resistance indicators available. To learn how many indicators to use and how to combine then visit the Technical Indicators section in CAPEX Academy.
Set up the order to buy Tesla shares
To buy Tesla shares CFD, click on the "Buy" button and a window is displayed to configure the purchase order:
The number of Tesla shares to be purchased must be entered and it is allowed to set up a Stop Loss to limit the potential loss, and/or a Take Profit to close a profitable position once the Tesla stock reaches a specific price. These orders can be configured based on price, pips, cash value or percentage.
To proceed with the purchase, click on "Place Order".
However, TSLA trading does not end here. You will want to check out the next step to make sure you are investing your money as well as you can.
Why Trade Tesla with CAPEX?
- Advanced AI technology at its core: Whether they prefer the web-based and mobile-ready WebTrader or favor the highly popular MetaTrader 5, we make sure investors make effective use of fast and reliable trade execution speeds, complex order and risk management tools, advanced charting options, powerful research tools in collaboration with highly-regarded platforms such as Trading Central or TipRanks.
- Trading on margin: Providing trading on margin (up to 5:1 for individual equities), CAPEX gives you accesss to the stock market with the help of CFDs.
- Trading the difference: When trading Tesla CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Tesla stock price. Online trading with CFDs is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop loss, take profit, and apply trading scenarios aligned with their objectives.
- All-round trading analysis: The browser-based platform allows traders to shape their market analysis and forecasts with sleek technical indicators. CAPEX provides live market updates and various chart formats, available on desktop, iOS, and Android.
- Focus on safety: CAPEX puts a special emphasis on safety:
- sc.capex.com is a website operated by KW Investments Limited, which is authorized and regulated by the Seychelles Financial Services Authority, license number SD020.
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- Global partnerships: CAPEX is proud to be the Proud Sponsor of Juventus, one of the most prestigious football clubs in the world, a football club that has a special place in the hearts of the people of Italy, with a strong legacy and a dedicated community.
5. Stay up to date with the latest news and rumours about Tesla (TSLA)
Get the latest Tesla Inc. (AAPL) stock news and headlines to help you in your trading and investing decisions.
History of Tesla Inc.
Tesla was formed in California in July 2003 by two engineers, Martin Eberhard and Marc Terpenning. Nikola Tesla was a great physicist, engineer, and futurist, and his company was named after him. Elon Musk spent $30 million in the company in 2004 and became its Chairman of the Board of Directors. Jan Wright and JB Straubel were also co-founders.
Tesla debuted its first automobile, a fully electric Roadster, in 2008, highlighting the company's innovative battery technology. This strategy, however, did not help Tesla avoid serious financial difficulties. The company was on the verge of bankruptcy in 2009, with barely $9 million in cash on hand. To survive, the company opened to investors, including Mercedes, and secured $40 million more by issuing convertible debt.
Tesla went public through the Initial Public Offering (IPO) on June 29, 2010, selling 13.3 million shares at $17 per share on the Nasdaq, bringing in $226.1 million.
The firm launched its first standalone charging stations, dubbed Superchargers, in 2012. Only two years later, Elon Musk unveiled Tesla's Autopilot, a semi-autonomous self-driving technology. Tesla debuted its new Model S, the world's first premium all-electric car, in the same year, combining efficiency and safety.
Tesla announced Powerwall, a massive rechargeable battery for residential structures, and Powerpack, a battery for commercial use, on April 30, 2015, in order to establish an overall sustainable ecosystem.
Tesla introduced the Model X in 2015, which is one of the world's fastest and safest SUV. The Model 3 was introduced in 2016, and it is a high-volume, low-cost electric vehicle aimed at a broader audience. Its manufacturing began in 2017.
Tesla then took the electric vehicle industry by storm, increasing its US vehicle sales by 280 percent from 48,000 to 182,400 between 2017 and 2018. With 245,240 units supplied and a market share of 12% of the plug-in category sales in 2018, it was named the world's bestselling plug-in passenger car manufacturer, both as a brand and as an automobile company.
Tesla had sold over 720,000 units worldwide since 2012 as of the conclusion of the second quarter of 2019. The business received approval to begin mass production in Shanghai, China, in October 2019.
Tesla had been losing money in most quarters for many years. However, the firm shocked experts in the third quarter of 2019, when it reported adjusted earnings of $1.61 per share on total quarterly revenue of $6.3 billion, compared to a loss of 40 cents per share expected by analysts.
Tesla's price jumped seven times from around $90 to over $700 in 2020, making it a historic year for the company. Tesla stock continued to rise above $1.000 by the end of 2021, despite the fact that growth stalled till the end of Q2.
*Last update: November 2021. Source: Wikipedia