Tesla Stock Overview

What is Tesla stock?

Tesla is a technology and automotive company that designs and produces electric vehicles, robotics products, and renewable energy storage and generation solutions (such as solar panels and solar batteries).

Elon Musk is the founder and CEO of Tesla and leads Tesla’s product design, engineering, and global manufacturing.

The Tesla symbol represents the shares of Tesla, Inc., which is listed on the Nasdaq (NASDAQ) and is traded as common stock.

In simple terms, every time you buy or sell Tesla., you are trading Tesla common stock on the Nasdaq.

Why do traders follow Tesla stock?

Tesla is a stock that is highly sensitive to news and is considered a volatile symbol in the US stock market. The market generally reacts quickly to events that happen for this company.

Tesla stock was added to the S&P 500 index on December 21, 2020, before the market open, and since then it has been exposed to index based investment flows.

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How is Tesla stock affected by the S&P index?

Since Tesla entered the S&P 500 index, in addition to fundamental and news factors, it can also be affected by capital flows in index funds. Funds and ETFs that track the S&P 500 buy or sell the index’s stock basket. Therefore, when new capital enters these funds or capital leaves them, the fund manager must, in proportion to Tesla’s weight in the index, execute part of the trades in Tesla. These buy and sell flows can affect trading volume and sometimes Tesla’s short term price movement.

Key drivers of Tesla stock price

Tesla’s price can change due to several factors:

Financial performance and market expectations

Revenue, profitability, profit margin, and cash flow are considered the main drivers.

The gap between actual performance and market expectations can cause sudden price jumps.

Guidance announced for future periods creates high sensitivity.

Operational and product factors

News related to production, deliveries, capacity expansion, and development of production lines can be influential.

Changes in product mix, pricing, and production costs can shift expectations.

Expansion of complementary businesses and large scale investments can create risk or opportunity.

Industry, competitors, and supply chain

The demand cycle for electric vehicles and competition in the industry can affect growth estimates.

Supply chain risks and the cost of materials and components can affect margins.

Changes in supportive policies and regulations in the vehicle and energy sectors can change market direction.

Macro conditions and market sentiment

Interest rates and the market’s risk on and risk off environment can affect the valuation of growth stocks.

News shocks and changes in investor expectations can intensify volatility.

Important corporate events for TSLA

The following events generally have the biggest impact on Tesla’s volatility:

Earnings reports and earnings related conferences are considered decisive.

Capital adjustments and equity events such as stock splits change the nominal share price structure.

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What is a stock split?

A stock split means the number of shares outstanding increases, without changing the company’s total value or the value of shareholders’ investment. The goal can be to reduce the nominal price per share and make the stock more accessible for retail investors and improve trading liquidity.

For example, a 3 for 1 split means if you have 1 share and its price is $300, after the split you have 3 shares and the price of each is $100. Your total holding value remains $300, and your ownership percentage in the company stays the same.

Major Tesla stock splits

• A 5 for 1 split was announced in the form of a stock dividend, and adjusted trading started on August 31, 2020.
• A 3 for 1 split was announced in the form of a stock dividend, and adjusted trading started on August 25, 2022.
• Both splits above were announced in the form of stock dividends, which increased the number of shares outstanding without changing the company’s total value.

Important note: Tesla has not announced a cash dividend for common stock and has also not considered paying cash dividends in the near future as likely.

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What is a dividend?

A dividend is an amount that a company pays to shareholders from retained earnings or a specified period profit. This payment is usually made in cash, per share.

Typical trading behavior of Tesla

Volatility: Tesla is known as a stock with medium to high volatility. When important news, including company earnings news, is released, volatility in this symbol increases.

Sensitivity to news and market sentiment

• Elon Musk and the media: Elon Musk’s media profile and his presence in different industries (automotive, aerospace, social media, cryptocurrencies) means any news or statement around him can affect market expectations.
• Company operational news: Data related to production, deliveries, product innovation, or changes in pricing policy are the main drivers of market reaction.
• Driver assistance systems (FSD): Tesla’s self driving capability still requires driver supervision. News about errors, accidents, or official investigations can intensify Tesla.’s short term volatility.
• Social media and fast news distribution: In positive scenarios (for example, strong vehicle performance) or negative scenarios (safety events), user reactions and search volume on social platforms can lead to sharp volatility and spikes in trading volume.
• Price gaps: After the market opens, or after news that causes a sudden strong price change, there is price gap risk.
• Spread and slippage risk: Liquidity and the speed of price changes directly affect spread and slippage. In these conditions, your order may be filled with a large price difference, which can affect the trade’s profit and loss ratio and the level of risk you take. To reduce this risk, you can use stop loss and reduce position size when the market is highly volatile or inactive.

How do traders analyze Tesla?

Technical analysis of TSLA

In technical analysis:

• The trend direction across specific time series is examined,
• Support and resistance areas and price reactions around them are evaluated,
• And volume and price behavior during important events are monitored.

Fundamental analysis of TSLA

In fundamental analysis of Tesla stock:

• Financial performance over a specific period and the sustainability of cash flow are reviewed,
• Growth quality, costs, operational risks, and competitive risks are assessed,
• And the impact of corporate events such as stock splits and the stock’s position in indices is evaluated.

Key risks when trading Tesla stock

• Tesla earnings reports can create the possibility of sharp jumps and order execution at an unfavorable price,
• Leveraged trading increases both returns and risks by the same degree,
• Swap costs may not be worthwhile for swing traders,
• Price gaps can cause the price to move past the defined stop loss.
• Changes in interest rate policy can affect stock valuation.

Please note that CFD trading on stocks may be subject to dividend adjustments or stock split adjustments. Reviewing adjustment rules is mandatory.

Trading Tesla with Aron Groups

Before you start trading the Tesla symbol, it is recommended to review the costs and trading conditions of Tesla stock carefully so you do not face unexpected losses.

Tesla trading conditions

Commission: 0.05% per lot (for contract size range 0 to 10,000)

Swap: Trade up to 14 days without paying overnight interest.

Tesla contract specifications

Minimum order distance means the minimum distance that must be kept between the current market price and stop loss, take profit, or pending orders. If you place an order closer than this value, the trading system will not accept it.

 Pip value of Tesla stock

Swap and commission

Tesla symbol trading hours in server time