GraniteShares 1.5x Short TSLA Daily ETF (TSDD)

Overview

The GraniteShares 1.5x Short TSLA Daily ETF (TSDD) aims to provide 1.5 times the inverse (opposite) of the daily performance of Tesla (TSLA) stock. It is designed for sophisticated investors seeking to profit from short-term declines in Tesla's stock price. The ETF uses financial instruments like swaps to achieve its leveraged and inverse objective.

Reputation and Reliability

GraniteShares is a relatively newer ETF provider, focused on offering leveraged and inverse products. They are known for providing specialized, high-risk investment tools.

Management Expertise

GraniteShares' management team has experience in structured products and derivatives, essential for managing leveraged and inverse ETFs.

Goal

To seek daily investment results, before fees and expenses, that correspond to one and one-half times (1.5x) the inverse (-1.5x) of the daily performance of the common stock of Tesla, Inc.

Investment Approach and Strategy

Strategy: The ETF employs a strategy of using financial instruments such as swap agreements to achieve its leveraged and inverse exposure to Tesla's stock. It is a daily reset fund, meaning its leverage is reset daily.

Composition The ETF's holdings primarily consist of swap agreements linked to the performance of Tesla's stock. It may also hold cash or other short-term investments as collateral.

Market Share: TSDD has a relatively small market share within the leveraged/inverse single-stock ETF space.

Total Net Assets (AUM): 29425800

Key Competitors

• Direxion Daily TSLA Bear 1X ETF (TSLS)
• AXS TSLA Bear Daily ETF (TSLQ)

Competitive Landscape

The competitive landscape consists of ETFs offering leveraged and inverse exposure to Tesla stock. TSDD offers 1.5x leverage, while competitors offer 1x, 2x or -1x and -2x leverage. TSDD's advantage lies in its specific leverage factor, appealing to investors seeking a particular level of inverse exposure. Disadvantages include increased risk due to the leverage and potential tracking errors.

Historical Performance: Historical performance data is highly dependent on Tesla's stock performance and is subject to significant volatility. Past performance is not indicative of future results.

Benchmark Comparison: There is no direct benchmark index for a 1.5x inverse daily Tesla ETF. Performance is evaluated against the inverse of Tesla's daily return, multiplied by 1.5.

Expense Ratio: 0.99

Average Trading Volume

The average daily trading volume varies but is generally sufficient for most investors, though it can be subject to spikes and lulls.

Bid-Ask Spread

The bid-ask spread can be wider than more liquid ETFs, reflecting the higher risk and specialized nature of the fund.

Market Environment Factors

Tesla's stock price is influenced by factors such as electric vehicle demand, technological advancements, regulatory changes, and overall market sentiment. These factors directly impact TSDD's performance.

Growth Trajectory

The growth trajectory is tied to investor demand for shorting Tesla. Increased volatility in Tesla can drive greater interest in TSDD.

Competitive Edge

TSDD's competitive advantage lies in its specific 1.5x inverse leverage, catering to a niche market of investors seeking amplified short exposure to Tesla. It allows investors to quickly and easily express a bearish view on Tesla without directly shorting the stock. However, the ETF's daily reset mechanism makes it unsuitable for long-term holding. Its daily reset also means that it is exposed to volatility drag over the long term.

Volatility

TSDD is highly volatile due to its leveraged and inverse nature. It is significantly more volatile than Tesla stock itself.

Market Risk

The primary market risk is the potential for Tesla's stock to increase in value, resulting in losses for TSDD. The leverage amplifies both gains and losses. Compounding and volatility decay can significantly impact long-term returns.

Ideal Investor Profile

The ideal investor is a sophisticated trader with a short-term bearish outlook on Tesla. They should understand the risks associated with leveraged and inverse ETFs and be able to actively monitor their investment.

Market Risk

TSDD is best suited for active traders seeking short-term tactical positions. It is not suitable for long-term investors or passive index followers due to the effects of compounding and the daily reset mechanism.

The GraniteShares 1.5x Short TSLA Daily ETF is designed for short-term traders who believe Tesla's stock price will decline. Its 1.5x inverse leverage amplifies both potential gains and losses, making it a high-risk investment. Due to the daily reset, it is unsuitable for long-term holding and should only be used by sophisticated investors. Its performance is directly tied to Tesla's daily price movements, and understanding the underlying risks is crucial before investing.

Data Sources:

• GraniteShares official website
• ETF.com
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be considered financial advice. Investing in ETFs involves risk, including the potential loss of principal. Leveraged and inverse ETFs are particularly risky and are not suitable for all investors. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.