Tips for Trading Tesla: What’s Driving Profits?
Tesla,Inc.(TSLA) is one of the most enticing stocks for trading on the North American NASDAQ exchange.
With countries and environmentally-minded citizens around the world dedicated to lowering their carbon emissions, Tesla’s role as an innovator in zero-emission electric automobiles has drawn international attention from investors and speculators large and small. Its lesser-known subsidiary Solar City creates solar panels for another lucrative revenue stream in the zero-emissions market for powering the electric grid for homes and commercial uses including the powering of electric automobiles.
Under the guidance of its founder and CEO Elon Musk, Tesla has propelled itself as a relatively small manufacturer to a powerhouse with an impressive market valuation of over $100 Billion USD.
Tesla now accounts for about 80% of electric car sales in the United States with sales booming from approximately 191,000 sales in 2018 to almost doubling to 367,000 cars delivered.
Recent openings of manufacturing facilities in China shows a promise to investors that Tesla will be able to lower costs and increase their profitability. Additionally, no country has a greater potential for a quicker growth for electric cars than China. China currently has 99% of the world’s estimated 250 million electric two-wheel vehicles and has committed to have 50% of all new car sales in China be electric cars by the end of 2020 (if manufacturers like Tesla can even keep up with that demand).
Tesla is also making inroads to other large markets like Europe that could easily double its sales and to even far-flung markets like Australia.
Quarterly & annual earnings reports, news reports of Tesla’s successes and setbacks, releases and even speculation about new products like their Roadster and Cybertruck help attract investors and traders. Even the excitement or concern stirred up by controversial tweets and illuminating interviews of Elon Musk all create opportunities for traders to prosper.
Remember in this market, traders can make money when a stock gains or loses value.
Even though online trading is often called the “Forex Market,” online brokers like CM Trading offer dozens upon dozens of assets in market segments ranging from Forex currency pairs, precious metals like gold and palladium, energy and agricultural commodities like oil and coffee, indices like the DOW and the DAX, cryptocurrencies like Bitcoin and individual stocks like Tesla.
CM Trading offers over 150 assets to trade from among all these segments.
With Contracts for Difference (CFD’s), traders learn that they make money trading on the movement of the asset. They can choose to buy or going “long” (speculating the value will go up) or selling or going “short” (speculating the value will go down). You do not have to “buy” an asset first before “selling” since in this market no one takes possession of the asset.
With the cost of shares of Tesla at about $500 a share (for example), a conventional trader not receiving any leverage in their trading, would need at least $500 in their account just to trade on one share. At CM Trading, traders are offered 20 to 1 leverage on all of the dozens of stocks (also called equities)offered. So, in principle, a trader with $500 could trade like they had $10,000 in the market.
Trades in online trading are calculated in lot sizes and each asset has a particular amount of units per lot.
For trading Tesla, 100 shares are offered per lot with a minimum trade of .10 lots (1/10 of 1 lot) or ten shares is the smallest trade size offered on Tesla. To calculate how much money is needed in a trading account to trade Tesla or any other asset, take the price of the asset multiply by the trade size (also called volume) and divide it by the leverage offered.
So for Tesla, if at $500 per share and with 100 shares per lot (500×100=50,000) /20 to1 leverage would equal $2,500 per a lot of equity in one’s account to open and sustain a one lot trade. With a minimum trade size of 0.10 lots (1/10th a lot) the smallest amount of money needed to trade on Tesla at $500 per share would be $250.
When trading stocks like Tesla most traders choose to have larger balances than just the bare minimum needed so their accounts can trade with enough or more than enough equity to sustain large market swings if their trades do not immediately move in the direction they predicted.
If a trader was trading on the Metatrader 4(MT4) trading platform with one lot of Tesla (100 shares) and Tesla’s value per share moved just $10 per share, a trader would be able to make $1,000 per lot traded (100 x10-$1,000) or for every $10 moved would equal $10,000 per lot. If trading, for example on one lot with a $10,000 investment, then they could stand to make 10 to 100% returns. If that same trader wanted to trade with a larger account to exercise lower risk then those same movements and the same trade volume on a $20,000 account would be able to sustain larger market movements with returns of 5 to 50%.
If you are interested in learning more about trading stocks like Tesla online, trading other assets like forex pairs, commodities, indices or cryptocurrencies, then one of CM Trading’s many Market Analysts is ready to assist you by working with you to develop a trading plan based on your goals and resources available for investing.
Register now to open an account or if you already have an account, contact your Market Analyst or our Support Team for further assistance.