GraniteShares ETF Trust GraniteShares 2x Short TSLA Daily ETF (TSDD) seeks to deliver twice the inverse daily performance of Tesla Inc. stock. This means when Tesla shares decline 1%, TSDD aims to gain 2%, providing amplified exposure for investors betting against the electric vehicle company's stock price.
How It Works
TSDD uses derivatives including swaps and futures contracts to achieve -200% daily exposure to Tesla stock movements. The fund resets its leverage daily at market close, meaning each trading day starts fresh with 2x inverse positioning. As an actively managed ETF, portfolio managers adjust derivative positions throughout the day to maintain target exposure. The fund holds cash and short-term securities as collateral for derivative positions rather than directly shorting Tesla shares.
Key Features
- Only ETF providing 2x leveraged short exposure specifically to Tesla, eliminating need for margin accounts or options strategies
- Daily rebalancing ensures consistent -200% exposure regardless of Tesla's price movements or volatility levels
- Launched in August 2023, capitalizing on Tesla's high volatility and significant retail investor interest
Risks
- This ETF loses money rapidly when Tesla stock rises, with potential for 100% losses if Tesla gains 50% in a single day
- Daily rebalancing causes compounding decay over multiple days—even if Tesla returns to original price, TSDD may show permanent losses
- Tesla's extreme volatility can cause dramatic swings, with potential for 40-80% daily moves during earnings or major news events
Who Should Own This
Designed exclusively for sophisticated day traders and short-term speculators with very high risk tolerance betting against Tesla within hours or days. Requires active monitoring and should represent less than 5% of portfolio. Completely unsuitable for buy-and-hold investors due to daily reset mechanics causing value decay over time.