How to Invest in Tesla Stock

Contributor, Benzinga

Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.

If you’re looking to invest in solar panels and electric vehicles or add an automobile industry heavyweight to your financial portfolio, Tesla Inc. (NASDAQ:TSLA) should immediately catch your eye. 

From maverick millennials to eco-friendly baby boomers, Tesla has been a fan favorite for environmentally conscious consumers worldwide. Tesla offers a way to reduce the onset of global warming and reduce carbon footprints. It’s also been instrumental in delivering solar-powered homes to people who seek clean and efficient energy for their lifestyles. 

Ready to buy Tesla stock? Learn about the company, how its stock performs and how add shares to your portfolio. Adding an eco-friendly, mainstream, popular brand to your portfolio now could result in dividends for years to come.

Tesla (NASDAQ:TSLA)

761.610

37.24 [5.14%]
728.85 – 764.48
546.98 – 1243.49
747.36
1.04B
26.75M/26.30M
789.04B
1.04B
/0%
0.000
847.56M

History of Tesla Inc.

  • 2003: Started by Martin Eberhard and Marc Tarpenning
  • 2008: Introduced Tesla Roadster to the market 
  • 2010: Went public with an initial public offering (IPO) of $17 per share 
  • 2016: Acquired solar panel manufacturer SolarCity 
  • 2020: Tesla Model 3 wins UK Car of the Year 2020, and its stock had a 5 for 1 split in August and traded at an all-time high of $695 per share in December.
  • 2021: Tesla reached a new all-time high of $900.40 after it reported an EPS of $0.80 and revenues of $10.74 billion.

How to Buy Tesla Stock

Tesla trades on the NASDAQ exchange under the ticker symbol TSLA. Tesla does not have a direct stock purchase option, unless you are employed by Tesla. If you would like to buy Tesla stocks, you need to go through a broker.

Additionally, you have several options. You can try short selling Tesla stock, sell or keep your Tesla stock depending on its performance or look into Tesla stock options.

If you do not have a brokerage account, you need to open one to be able to buy TSLA shares. As a general rule of thumb, don’t invest more money than you can afford to lose.    

Step 1: Buy through your brokerage.

Once you have your brokerage account set up, you can either buy a Tesla stock at market price or choose to buy a call or a put option on the Tesla stock. If you choose to buy it at market price, you can hold onto the stock indefinitely or till you want to sell. 

However, if you are purchasing a call or put option, it is only tradable up to a limited time. If you are buying a call option, you would want the stock value of Tesla to go up before trading it. 

On the other hand, if you are buying a put option, you would want the stock value of Tesla to go down before trading it. To know more about the difference in buying a call option and buying a put option, click here.

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  • High non-trading fees

Step 2: Choose a strike price.

A strike price is the price that you are willing to pay to buy a stock option at a premium. For instance, if Tesla stock is currently valued at a market price of $664, you could set a strike price of $650 to buy put options. 

In the near future, if Tesla stock value dips below your strike price of $650, you could sell the put options at that time to turn a profit. In this case, if the Tesla stock dipped to $640, you could make a profit of $10 per put, minus the premium. 

Step 3: Choose an expiration date.

Every put and call option bought comes with an expiration date. Post expiration date the options held by the investor become invalid. The expiration date can be set anywhere between 1 week to 2 months or even several years. 

Be wise while setting an expiration date, as it provides the window of opportunity to freely trade your call and put options. Remember that the longer you set an expiration date, the more premium you will pay on the options purchased. 

Step 4: Decide how many contracts you want.

Each call or put option that you purchase of a particular stock is issued with a contract for 100 shares of stock. Depending on your budget and how you feel about a company’s prospects, you can decide the number of contracts you want to buy. You can also consult a broker or a financial advisor to help you decide. 

Step 5: Watch stock prices.

Is Tesla stock overvalued? It can be at times, but you may hold the stock long enough to extract value from your holdings. Some people ask themselves, “should I sell Tesla stock,” because they’re not sure if it can rise any higher or if it will be overtaken by other EV manufacturers.

The 12-month average price target of Tesla stock is $455 , with a high estimate of $788 and a low estimate of $60, according to the NASDAQ. Based on Tesla’s recent performance in the market, you should give yourself more than 1 week to take advantage of the stock options. While you hold onto Tesla stocks, you can keep a close watch on its day-to-day valuations here.  

Cons of Buying Tesla Stock

As you checkup on Tesla stock, remember that the Tesla stock discussion is not 100% positive. Tesla has issues of its own from its planned factory in Wolfsburg to reliability and Elon Musk’s public persona that could turn out to be a little less than positive.

  • Tesla’s infamous CEO Elon Musk has a reputation for being eccentric. From twisted tweets to risky relationships, Musk’s questionable actions have a direct impact on Tesla’s stock value. It comes as no surprise that a supervising board has been appointed to monitor Musk’s behavior.   
  • In fact, Musk’s online presence serves as an advertisement for other things like cryptocurrencies, SpaceX and anything else that might pique his interest.
  • Tesla’s daily stock value has been volatile to say the least.
  • Tesla stocks do not pay dividends to its investors.
  • Tesla vehicles have been hit with accusations that they are unreliable, unsafe, poorly built, etc. While it’s difficult to sus out the complexities of a modern vehicle and the technology behind it, stock prices tend to rise and fall with the news cycle.

Pros of Buying Tesla Stock

  • The highly volatile stock price of Tesla gives investors a fair chance to sink their teeth into its stock without burning a hole in their pockets. 
  • According to a CNBC report, Elon Musk has increased his net worth by $140 billion, due in large part to the 650% rise in TSLA stock. If you had invested $1,700 on 100 shares of TSLA stock during its initial public offering in 2010, you would have made $63,300 profit on the stock at current market prices. 
  • Tesla is the first automobile company to go public since Ford in 1956. As of March 2020, Tesla is valued at a market capitalization of $627.29 billion. That’s more than General Motors and Ford combined.  
  • From self-driving cars to sustainable and economic energy reserves for your home, Tesla is always ahead of the curve when it comes to innovation. 
  • Tesla has shipped more than 139,000 electric vehicles in the third quarter of 2020. Although plans plans to open a factory in Germany have been delayed, Tesla has a relatively new manufacturing plant in Shanghai, China and is geared up to grow in 2021. 
  • Tesla has been able to deliver a record number of electrical vehicles in the face of a global pandemic and economic recession in 2020. 

Choose Your Best Broker

When it comes to investing in stocks, you have a wide variety of brokers to choose from. If you are new to stock trading, you might want to speak to a discount broker or a full-service broker to assist you in your investments. Take your time to evaluate brokers until you feel you can trust them with your wealth. 

Tesla stock predictions can only tell you so much. Yes, you may review a Tesla stock forecast and improve the performance of your portfolio. With the help of online brokers, you can review a Tesla stock graph, look through Tesla’ s latest financial results and get a better idea of Tesla’s financial profile.

Brokers are legally bound to put your best interest before their own. However, if you are familiar with stock exchange jargons and trade, you can dive right into it on an online brokerage platform. 

There are quite a few out there and Benzinga’s guide to online stock trading brokers is your best bet to find one that’s right for you. Check for commission rates and minimum account requirements before signing up with any brokerage platform.

get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
get started securely through Moomoo’s website
Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No chat support
Get started securely through Axos Invest’s website
Best For
Sign Up Bonus
N/A
1 Minute Review

It seems like new digital investment management platforms are sprouting up left and right, and for good reason — there’s a great need for easy, straightforward investment management that doesn’t cost an arm and a leg in fees or to get started. If you’re new to investing or an old hat who wants to make the switch to a virtual manager, deciding which features you need can be confusing if not overwhelming.

If you want a no-frills financial management platform, Axos Invest (formerly WiseBanyan) takes a traditional but sophisticated approach to automated online investing.

Best For
  • Traditional investors trying out an automated investor for the first time
  • New investors that want to take a hands-off approach to portfolio management
Pros
  • Straightforward automated investing
  • Relatively low account minimum and automated investing fee
  • A solid roster of available investment account types
Cons
  • Not a stand-out from other services if you’re someone who likes all the bells and whistles with your digital financial platform
  • No direct relationship with a human financial advisor
get started securely through Interactive Broker’s website
Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
get started securely through eToro’s website
Disclosure: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
Best For
Copy Trading
N/A
1 Minute Review

eToro is a broker that offers access to over 25 of the world’s most popular cryptocurrencies, forex and over 1600 stocks. They have a few unique education and useability tools. Traders can begin buying and selling in as little as 10 minutes.

eToro’s unique CopyTrader feature allows new investors to “copy” the buy and sell orders of professional investors, while the company’s eToro Club feature provides investors with a range of additional education tools and resources. 

Best For
  • Traders looking for an easy-to-use platform
  • Traders who want to practice their trades using a virtual account before entering the market
Pros
  • Simple platform that is easy to master
  • CopyTrader feature that allows new traders to copy the same strategies used by professionals
  • Virtual dummy account that gives you $100,000 to practice trades
Cons
  • High non-trading fees

Tesla as a Trailblazer

To quote Nikola Tesla himself, “Let the future tell the truth. The present is theirs; the future, for which I really worked, is mine.” And as promised, Tesla Inc. has delivered economic, efficient and elegant cars. 

How high is Tesla stock expected to go? The sky’s the limit, but remember that a Tesla stock analysis cannot predict EV acceptance or the company’s valuation over the next few years or into the future.

Buy Tesla stock if you want to invest in what could be a legacy stock for quite some time. A long-term investment in such a competitive company should prove to be profitable, especially if you share Tesla’s commitment to a sustainable future.