EV maker Tesla (TSLA) is one of the most volatile large-cap stocks during earnings seasons, which is exactly why some investors look for ways to increase their potential upside when they have a strong conviction. One approach that continues to gain attention is the use of 2x leveraged ETFs, which are designed to amplify the daily performance of a stock. For example, GraniteShares offers products that allow investors to take an aggressive position in Tesla without directly using options or margin accounts through the GraniteShares 2x Long TSLA Daily ETF (TSLR) or GraniteShares 2x Short TSLA Daily ETF (TSDD).
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Trade TSLA with leverageHow Do 2x Leveraged ETFs Work?
Before getting into Tesla specifically, it’s important to understand how 2x leveraged ETFs actually work. As the name suggests, these funds are designed to deliver twice the daily return of the underlying stock. For example, the image below shows Tesla stock rising by 3.1% within a day, and TSLR rising by 6.1% in the same period of time. On the other hand, if Tesla were to fall by 4.6%, the ETF would fall by about 9.2%.
Past performance does not guarantee future results. The image is for illustrative purposes.
The same mechanism applies to TSDD, except it is designed to move in the opposite direction of Tesla stock, potentially benefiting when Tesla shares decline. It does this through the use of derivatives and daily rebalancing, which seeks to maintain a consistent inverse position. Because of this structure, TSDD is generally used for short-term trading rather than long-term holding, particularly around catalysts such as earnings reports. Also, TSDD is a short-term trading instrument that could lose value over time.
Tesla Is Well-Known for Volatility
Now, when it comes to Tesla, its volatility is well known. The stock is heavily influenced by multiple factors, including delivery numbers, margins, AI developments, and investor sentiment on autonomy and robotics. As a result, earnings reports often lead to sharp moves in either direction. For investors who already have a strong opinion going into those events, whether bullish or bearish, leveraged ETFs may offer a simpler way to magnify their view. Instead of committing more capital to shares or dealing with complex options strategies, this approach keeps things more straightforward.
At the same time, Tesla’s story is no longer just about electric vehicles. More and more, the focus is shifting toward AI, Full Self-Driving, Robotaxi potential, and even robotics through Optimus. Because of that, the stock often reacts not just to current results, but also to what management says about the future. This adds more uncertainty, but also more opportunity. When expectations miss the mark, Tesla stock can move sharply, creating the kind of environment where leverage may have a greater impact.
Of course, it’s important to remember that leverage works both ways. While gains can be amplified, losses can also compound faster, especially in a stock as volatile as Tesla. Therefore, these products are generally best suited for investors who are actively following the stock and understand the risks. Still, for those with a clear short-term view, especially around earnings or major announcements, 2x leveraged ETFs can be a useful tool.
What Is the Prediction for TSLA Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on the 13 Buys, 11 Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $403.13 per share implies .63% upside potential.
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The Fund is not suitable for all investors. The investment program of the funds is speculative, entails substantial risks and include asset classes and investment techniques not employed by most ETFs and mutual funds. Investments in the ETFs are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged (2X) investment results, understand the risks associated with the use of leverage and are willing to monitor their portfolios frequently. For periods longer than a single day, the Fund will lose money if the Underlying Stock’s performance is flat, and it is possible that the Fund will lose money even if the Underlying Stock’s performance increases over a period longer than a single day. An investor could lose the full principal value of his/her investment within a single day.
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