Want to pile on Elon and try to make a few bucks? You might consider TSLZ
In just a few years, Elon Musk has gone from being seen as a quirky billionaire entrepreneur to one of the most reviled people on Earth. It didn't take much for the fall in stature - from giving a Hitler-like salute, calling former astronaut, veteran and Arizona Senator Mark Kelly a traitor for supporting Ukraine to his full-throat support of Donald Trump and legally questionable intrusions into federal government agencies via the so-called DOGE.
The most visible casualties of Musk's actions over the last several months have been the share price of one of the companies he leads, electric vehicle manufacturer Tesla. The leading EV manufacturer has seen a substantial worldwide decline in new car sales, which has resulted in a steep fall in the share value of Tesla (TSLA), which has also dented Musk's substantial wealth.
Along with the decline in stock prices, Tesla dealerships have been targeted with repeated protests. Furthermore, and unfortunately, dealerships worldwide have been vandalized, and an unknown group recently doxxed Tesla owners.
Given society's cynicism, one has to wonder: Is there a way to capitalize on Musk and TSLA's woes? There is.
Instead of selling short, which is risky for retail investors, an ETF, TSLZ, can be purchased.
TSLZ is the ticker symbol for the T‑Rex 2X Inverse Tesla Daily Target ETF - a leveraged inverse exchange‐traded product that aims to deliver a 200 percent of Tesla's (TSLA) daily performance.
In other words, if TSLA falls by one percent on any given trading day, TSLZ is designed to rise by about two percent (before fees and expenses), and vice versa.
Its design means that if you expect Tesla's stock to drop over a few days, TSLZ might see gains on those days. Ultimately, TSLZ's prospects to increase in value are entirely tied to short‑term bearish moves in Tesla's stock.
Analysts typically frame any potential upside for TSLZ in the context of a bearish outlook on TSLA rather than forecasting a price target for the ETF itself.
In summary, while TSLZ can experience significant gains on days when TSLA falls, its performance over longer periods is inherently unpredictable due to daily rebalancing and compounding effects.
Most analyst commentary and product reviews stress that TSLZ is intended for very short‑term, tactical trades. These products are not suitable for buy‐and‐hold investors.
But if you think TSLA's short-term prospects are dim, buying a few hundred dollars of these shares is probably no different than going to Sky River and pumping C notes into the one-armed bandit!
Disclaimer: Investing in financial markets involves inherent risks, including the potential loss of principal. Past performance is not indicative of future results, and there are no guarantees of profit. Before making any investment decisions, individuals should carefully consider their financial objectives, risk tolerance, and consult with a qualified financial advisor or professional.
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Fools rush in where wise men never go. Excerpt from the ETF's website:
"The Fund will lose money if the underlying security performance is flat over time, and as a result of daily rebalancing, the underlying security’s volatility and the effects of compounding, it is even possible that the Fund will lose money over time while the underlying security’s performance increases over a period longer than a single day. The Funds seek daily inverse leveraged or long leveraged investment results and are intended to be used as short-term trading vehicles. The Funds are not intended to be used by, and are not appropriate for, investors who do not intend to actively monitor and manage their portfolios. The Funds’ investment adviser will not attempt to position each Fund’s portfolio to ensure that a Fund does not gain or lose more than a maximum percentage of its net asset value on a given trading day. As a consequence, if a Fund’s underlying security moves more than 50%, as applicable, on a given trading day in a direction adverse to the Fund, the Fund’s investors would lose all of their money."
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