Innovate Your TSLA Trades: Single Stock Daily Leveraged & Inverse ETF Strategies for Earnings Season

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Tesla's (TSLA) Q4 2024 earnings report, scheduled for January 29th, 2025, will be closely scrutinized by investors. Key areas of focus include vehicle delivery numbers, profit margins amid recent price cuts, and updates on new model launches. Investors will also be watching for commentary on the Cybertruck ramp-up, progress on the next-generation platform, and developments in the energy storage business.

In addition to these key areas, investors will be looking for management's guidance on 2025 delivery targets, updates on manufacturing efficiency, and the company's strategy in an increasingly competitive global electric vehicle (“EV”) market.

As one of the market's most volatile stocks, TSLA often sees significant price swings around earnings releases. For traders looking to attempt to capitalize on this increased volatility, whether bullish or bearish, Direxion's Single Stock Daily Leveraged & Inverse ETFs are popular tools to potentially profit from anticipated price movements.

What to Expect from Tesla's Next Earnings Report

Analysts expect Tesla to report earnings of $0.64 per share on January 29, marking a potential 12.28% increase from last year's $0.57. However, recent delivery numbers have raised concerns, with Tesla reporting its first-ever annual decline in vehicle deliveries. The company delivered 1.79 million vehicles in 2024, falling short of Wall Street's expected 1.806 million units.

The previous quarter saw mixed results, with earnings per share of $0.72 beating estimates but delivery numbers missing expectations. Management's commentary on margins and competition drew particular attention from investors.

Tesla's Earnings Track Record

The EV leader has shown mixed results over recent quarters, with earnings surprises averaging 12.28% in 2024. October's report sparked notable volatility, with shares moving over 5% in the following session. Recent quarters have seen an average post-earnings move of 4.5%, highlighting the potential for significant price action.

2 ETFs for Speculating on Tesla's Short-Term Direction

Whether you're bullish or bearish on TSLA, Direxion's Single Stock Daily Leveraged & Inverse ETFs, launched in August 2022, are great short-term trading tools for traders to capitalize on increased movement for the stock.

Unlike traditional ETFs, Direxion's ETFs use derivatives and swaps to deliver leveraged and inverse daily returns, making them especially potent around high-volatility events like earnings announcements.

Bullish Strategy: TSLL

The Direxion Daily TSLA Bull 2X Shares (TSLL) offers traders a leveraged way to bet on TSLA. TSLL aims to deliver 2x the daily performance of TSLA stock, less fees and expenses. Since its inception, TSLL has attracted substantial trading volume, particularly during earnings seasons.

• Daily objective of 2x exposure to TSLA's performance
  • If Tesla stock goes up 1% in a day, TSLL aims to go up 2% (before fees)
  • If Tesla stock goes down 1% in a day, TSLL aims to go down 2% (before fees)
• Perfect for traders with high risk tolerance to bet on positive earnings surprises
• Historically sees highest volume in first two days after results
• Most effective for quick trades during strong upward momentum
• Average daily volume exceeds 56 million shares

Bearish Strategy: TSLS

The Direxion Daily TSLA Bear 1X Shares (TSLS) aims to provide daily investment results, before fees and expenses, that are the inverse (-1x) of the daily performance of TSLA stock. TSLS is unleveraged but offers a way to potentially profit from a decline in Tesla's stock price without directly short-selling* the stock itself.

• Seeks inverse (-1x) of TSLA's daily performance
  • If Tesla stock goes up 1% in a day, TSLS aims to go down 1% (before fees)
  • If Tesla stock goes down 1% in a day, TSLS aims to go up 1% (before fees)
• Ideal for hedging or playing potential earnings disappointment
• Offers traders utilizing their retirement accounts that forbid short selling (like an IRA or 401(K)) the ability to capitalize on the downward movement of TSLA
• Particularly effective during guidance-driven selloffs
• Average daily volume of 9 million shares

It is important to remember that TSLL and TSLS are best suited for short-term trading strategies. Due to the daily rebalancing of their investment objective, their performance may not directly track the expected returns of Tesla stock over extended periods.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stack rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods /anger than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will Jose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will Jose money even if the underlying stock's performance increases. and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in TSLA.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund's investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund's other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with TSLA and may increase the volatility of the Bull Fund.

Daily Correlation Risk - A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with TSLA and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Daily Inverse Correlation Risk - A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with TSLA and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Tesla Investing Risk — The trading price of TSLA has been highly volatile and could continue to be subject to wide fluctuations in response to various factors. Tesla, Inc. Investing Risk — Tesla, Inc. faces risks associated with future growth and success of consumers' demand for electric vehicles; increasing competition; variability in the market for electric vehicles; potential delays in developing and launching new products; mismatches between supply and demand for the products; charging networks may be difficult to establish; product liability claims; cyberattacks; financial costs; system security and data breeches; as well as the risks related to the fact that communications from Mr. Musk to the public may significantly impact the trading price of TSLA. Automotive Companies Risk — The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. Automotive companies can be significantly affected by labor relations, fluctuating component prices and supplier disruptions.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily TSLA Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

Distributor: ALPS Distributors, Inc.

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