Tesla Inverse ETF 3x Leverage and Risks

Author

Reads 297

A sleek red luxury electric car parked under bright sunlight on a paved road.
Credit: pexels.com, A sleek red luxury electric car parked under bright sunlight on a paved road.

The Tesla Inverse ETF 3x Leverage is a type of exchange-traded fund that provides triple the inverse daily return of the Tesla stock, relative to the S&P 500 index.

This ETF is designed to move in the opposite direction of Tesla's stock price, meaning if Tesla's stock goes up, the ETF goes down, and vice versa. It's a way for investors to potentially profit from a decline in Tesla's stock price.

The 3x leverage means that for every 1% decline in Tesla's stock price, the ETF will move 3% in the opposite direction. This can amplify potential gains, but also increases the risk of significant losses if the stock price moves in the opposite direction.

Investors should be aware that inverse ETFs can be volatile and may not be suitable for all investors, particularly those with a low risk tolerance.

What is Tesla ETP

A 3x leverage Tesla ETP, or exchange-traded product, is a financial instrument that enables investors to gain exposure to Tesla stock with daily three times the leverage.

Credit: youtube.com, What Are Leveraged & Inverse ETFs & ETNs & How Do They Work?

Investors can gain daily three times the leverage for every $1 invested in the ETP, less the management fees.

Direxion already offers several 3x leveraged ETFs, allowing investors to bet on the bullish or bearish side for indexes like the Dow Jones Industrial Average.

Investing in a 3x leverage ETP can be a potentially high-risk strategy, but it can also yield high rewards.

Tesla shares have traded between $539.49 and $1,243.49 over the last 52 weeks.

Tesla is the largest holding in ARKK at 8.7% of assets.

Shares have increased over 1,600% over the last five years and over 13,000% in the last 10 years.

Risks and Performance

Investing in a 3x leverage Tesla ETF can be a high-risk strategy, as it amplifies both gains and losses.

The historical performance of 3x leverage ETPs can be highly volatile, with large gains and losses possible in short periods of time.

Past performance does not guarantee future results, and investors should do their own research before investing.

A 3x leverage ETP seeks to provide a return three times the return of the index or other benchmark that it tracks, meaning if Tesla's stock falls by 1%, the ETP would fall by 3% on the day.

Metrics de Riesgo

A row of Tesla charging stations illuminated at night in Redlands, CA.
Credit: pexels.com, A row of Tesla charging stations illuminated at night in Redlands, CA.

Metrics de Riesgo are a crucial aspect of understanding the risks associated with investing in 3x leverage ETPs. The historical performance of these ETPs can be highly volatile, with returns fluctuating greatly.

One of the key metrics to look at is Volatilidad, which measures the degree of price movement. For the 3x Short Tesla ETP, the 1-year Volatilidad is 107.64%, while the 3-year and 5-year Volatilidad are 192.23% and not available, respectively.

The Pérdida máxima, or maximum loss, is another important metric. For the 3x Short Tesla ETP, the 1-year Pérdida máxima is -99.20%, while the 3-year and 5-year Pérdida máxima are -99.96% and not available, respectively.

The Ratio de Sharpe is a measure of risk-adjusted return. For the 3x Short Tesla ETP, the 1-year Ratio de Sharpe is -2.97, while the 3-year and 5-year Ratio de Sharpe are -0.31 and not available, respectively.

Here are the key risk metrics for the 3x Short Tesla ETP:

Investors should be aware that past performance does not guarantee future results, and it's essential to do their own research before investing in 3x leverage ETPs.

Risks of Investing in ETPs

Credit: youtube.com, What are the risks of investing in ETFs? | Switzer TV

Leverage can be a double-edged sword, amplifying potential gains but also increasing the risk of losses. Leverage has been around for decades, and various financial products offer investors leverage and short exposure.

Investors should understand the benefits and risks of each leverage product, considering their goals, risk appetite, and circumstances for the specific trade being considered. This requires a high level of knowledge and understanding of the product and the underlying asset.

A 3x leverage ETP, such as the 3x leverage Tesla ETP, can amplify daily exposure to Tesla's stock, but it also comes with high management fees. These fees can eat into the investor's returns, making it essential to carefully consider the costs involved.

Investing in a 3x leverage ETP can be a potentially high-risk strategy, with the potential for significant losses. In fact, the Leverage Shares -3x Short Tesla ETP Securities has a maximum potential loss of -99.20% in 1 year.

Credit: youtube.com, Are Leveraged ETPs Safe?

To put this into perspective, a 3x leverage ETP can result in a -99.20% loss in 1 year, which is a staggering amount. This highlights the importance of thoroughly researching the product, understanding the risks involved, and diversifying one's portfolio to mitigate potential losses.

Here are some key metrics of risk and analysis for the Leverage Shares -3x Short Tesla ETP Securities:

These metrics demonstrate the significant risks involved with investing in a 3x leverage ETP, emphasizing the need for careful consideration and thorough research before making a decision.

Investing in ETPs

ETPs, or Exchange-Traded Products, are a type of investment that allows you to track the performance of an underlying index, commodity, or asset.

They're often used for inverse investing, which means they aim to provide the opposite returns of the underlying asset, as seen in the case of the Tesla Inverse ETF 3x.

ETPs are typically traded on an exchange, just like stocks, and can be bought and sold throughout the trading day.

Credit: youtube.com, TESLA Stock 3x times faster ... leverage with Graniteshares 3LTS ....

This allows for more flexibility and control over your investment, but it also means you'll need to be prepared for potential losses if the market moves against you.

The Tesla Inverse ETF 3x is a specific example of an ETP that uses leverage to amplify the inverse returns of Tesla's stock price.

Tesla ETP Listings and Codes

The Leverage Shares -3x Short Tesla ETP Securities has a ticker of TS3S.

This ETP is listed on various exchanges, including the London Stock Exchange and Borsa Italiana.

The ticker for the 3x Short Tesla ETP on the London Stock Exchange is 3STS, 3STE, and 3STP, depending on the trading currency.

The ISIN code for all these tickers is XS2656471039.

Here is a list of the ETP listings and codes for the 3x Short Tesla:

How to Invest in ETPs

Investing in ETPs requires a high level of knowledge and understanding of the product and the underlying asset.

Credit: youtube.com, How do Exchange Traded Products (ETPs) Work?

Investors should conduct thorough research before investing, including understanding the risks involved and the historical performance of the product.

Investors should also diversify their portfolios and not put all their eggs in one basket by investing solely in a 3x leverage ETP.

A 3x leverage ETP can amplify gains but also multiplies losses, making it a high-risk investment.

Investors should be aware of the risks involved and understand that investing in a 3x leverage ETP is not suitable for all investors.

Investors who are new to ETPs should consider starting with a lower-leverage product to gain experience and build their confidence.

Fees for ETPs

Fees for ETPs can be a significant consideration for investors.

Management fees are associated with 3x leverage ETPs, which can eat into your returns.

Performance fees may also apply, which can be a percentage of the ETP's profits.

Transaction fees can be incurred when buying or selling ETPs.

Understanding ETPs

A 3x leverage Tesla ETP is a financial instrument that enables investors to gain exposure to Tesla stock with daily three times the leverage.

Credit: youtube.com, Investing With Leverage (Borrowing to Invest, Leveraged ETFs)

Investors should understand that leverage can be one of the primary risks attached to leverage ETPs, and it's essential to research the product and the underlying asset thoroughly before investing.

A 3x leverage ETP seeks to provide a return three times the return of the index or other benchmark that it tracks, which means if Tesla's stock rises by 1%, the ETP would rise by 3%.

Investors should also be aware that investing in a 3x leverage ETP requires a high level of knowledge and understanding of the product and the underlying asset.

ETP Functionality

A 3x leverage ETP can amplify your investment returns, but it's essential to understand how it works. It seeks to provide a return three times the return of the index or benchmark it tracks.

If the underlying stock rises, the ETP will rise by a corresponding percentage. For example, if Tesla's stock rises by 1%, the 3x leverage ETP would rise by 3%.

However, this also means that if the underlying stock falls, the ETP will fall by a corresponding percentage. If Tesla's stock falls by 1%, the ETP would fall by 3% on the day.

Seven Things to Know About Tesla ETP Core Meaning

Credit: youtube.com, 'Magnificent Seven' playbook: What to know about Tesla

A 3x leverage Tesla ETP is a financial instrument that enables investors to gain exposure to Tesla stock with daily three times the leverage. This means that for every $1 invested in the ETP, an investor would have $3 in daily exposure to Tesla's stock less the management fees.

Investing in a 3x leverage ETP can be a potentially high-risk strategy, which means it's not suitable for all investors.

The daily leverage of a 3x leverage Tesla ETP is designed to amplify the investor's exposure to Tesla's stock price movements. This can be beneficial in a rapidly rising market.

However, the high-risk nature of 3x leverage ETPs means that investors could lose their entire investment in a short period of time if the market moves against them.

Investors should carefully consider their risk tolerance and financial goals before investing in a 3x leverage Tesla ETP.

Final Thought:

Investors should be aware that ETPs can amplify potential losses as well as gains, making them a high-risk investment option.

Credit: youtube.com, Short & Leveraged ETPs Explained

A 3x leverage ETP, like the Tesla ETP, can provide higher returns, but it's crucial to understand the associated risks.

It's essential to do thorough research and consult with a financial advisor before investing in an ETP or any other investment product.

Investors should consider diversifying their portfolios to mitigate potential losses and explore other investment alternatives.

Leveraging a stock like Tesla can be an effective way for investors with high-risk tolerance to gain exposure to the market.

Frequently Asked Questions

Is there a 3x Tesla ETF?

Yes, there is a 3x Tesla ETF, known as the Leverage Shares 3x Tesla ETF, with the ticker symbol 3TSL. It's designed to provide triple the daily return of Tesla's stock.

What is the symbol for the Tesla short ETF?

The symbol for the Tesla short ETF is TSLQ. This ETP fund offers a 3x short exposure to Tesla, allowing investors to profit from a decline in the company's stock price.

Wilbur Huels

Senior Writer

Here is a 100-word author bio for Wilbur Huels: Wilbur Huels is a seasoned writer with a keen interest in finance and investing. With a strong background in research and analysis, he brings a unique perspective to his writing, making complex topics accessible to a wide range of readers. His articles have been featured in various publications, covering topics such as investment funds and their role in shaping the global financial landscape.

Love What You Read? Stay Updated!

Join our community for insights, tips, and more.