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Tesla Inc. (TSLA) is on a historic losing streak, falling for eight consecutive weeks—the longest in the company's history. Could this week make it nine in a row?
While Tesla investors are licking their wounds, things are even worse for those holding leveraged Tesla ETFs.
Leveraged ETF Gains and Losses
Shares of Tesla have lost half their value since peaking in December 2024, but the Direxion Daily TSLA Bull 2X Shares (TSLL) has plummeted 80% during the same time frame.
On the flip side, inverse Tesla ETFs have surged. The Tradr 2X Short TSLA Daily ETF (TSLQ) has nearly tripled since Tesla’s peak, benefiting from the stock’s downward trajectory.
TSLL and TSLQ are the largest and third-largest Tesla-related ETFs in the U.S., respectively, with $2.9 billion and $324 million in assets under management. But they are just two of the 17 Tesla-related ETFs in the U.S., which collectively hold $4.8 billion in AUM.
The Tesla ETF Landscape
Including TSLL, five Tesla-focused ETFs offer various levels of leverage on the stock. On the inverse side, there are four ETFs designed to short Tesla at different magnitudes.
Then, some ETFs employ covered call strategies on Tesla to generate income. The largest is the $840 million YieldMax TSLA Option Income ETF (TSLY), which has declined around 55% since Tesla’s peak—slightly more than the stock itself.
Using Tesla options to generate income has become a popular strategy, with five such ETFs currently listed in the U.S.
One Tesla ETF taking a different approach is the Simplify Volt TSLA Revolution ETF (TESL), which uses options to “manage downside risks.” However, that strategy hasn’t provided much protection lately—TESL is down 53% since Tesla’s peak, slightly worse than the stock itself.
The following are two smaller, but intriguing, Tesla ETFs.
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Battleshares TSLA vs. F ETF (ELON): A pair trade that combines a 2x leveraged long position in Tesla with a 1x short position in Ford Motor (F). The fund, which launched a month ago, is already down 63%.
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STKD 100% UBER & 100% TSLA ETF (ZIPP): This fund uses leverage to combine positions in both Tesla and Uber Technologies Inc. (UBER). It launched earlier this month and is already down 19%.
The Bottom Line
Tesla’s ongoing decline has put immense pressure on leveraged long ETFs while providing a windfall for inverse ETFs.
With Tesla teetering on its ninth-straight week of losses, investors in these funds will be watching closely to see if the trend reverses—or if the selloff continues.