GraniteShares 1.5x Short TSLA Daily ETF (TSDD)

Overview

The GraniteShares 1.5x Short TSLA Daily ETF (TSDD) is designed to provide 1.5 times the inverse (opposite) of the daily performance of Tesla (TSLA) stock. It aims to generate profits from a decrease in Tesla's share price. Its asset allocation is primarily derivatives and swaps tied to TSLA. The investment strategy involves using financial instruments to achieve the 1.5x short exposure, requiring constant monitoring and rebalancing.

Reputation and Reliability

GraniteShares is a smaller ETF provider known for its leveraged and inverse ETFs. They are considered reliable in delivering on their stated investment objectives, but their products are inherently risky.

Management Expertise

GraniteShares has a dedicated team experienced in managing leveraged and inverse ETFs, understanding the complexities of daily rebalancing and derivative instruments.

Goal

The primary investment goal is to provide 1.5 times the inverse of the daily performance of TSLA, allowing investors to potentially profit from a decline in TSLA's stock price.

Investment Approach and Strategy

Strategy: The ETF uses a leveraged inverse strategy, employing derivatives such as swaps to achieve 1.5x short exposure to TSLA's daily performance.

Composition The ETF holds primarily swap agreements and other derivative instruments designed to replicate the inverse of TSLA's daily returns. It also holds cash for collateral purposes.

Market Share: TSDDu2019s market share is relatively small compared to broader market ETFs, due to its niche strategy and higher risk.

Total Net Assets (AUM): 28330618

Key Competitors

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

Competitive Landscape

The competitive landscape consists of other inverse and leveraged ETFs focusing on TSLA. TSDD offers 1.5x leverage, potentially providing higher returns (or losses) compared to 1x inverse ETFs. TSDD's disadvantage lies in its higher risk and potential for amplified losses, especially in volatile market conditions.

Historical Performance: Historical performance is highly dependent on TSLA's stock price fluctuations. Past performance is not indicative of future results due to the daily reset feature of leveraged ETFs.

Benchmark Comparison: There is no direct benchmark, but performance should be compared against -1.5x the daily performance of TSLA.

Expense Ratio: 1.15

Average Trading Volume

The average trading volume is moderate, which may affect order execution for larger trades.

Bid-Ask Spread

The bid-ask spread can be relatively wide, especially during periods of high volatility, potentially increasing the cost of trading.

Market Environment Factors

The ETF's performance is highly sensitive to news, announcements, and overall market sentiment related to Tesla and the electric vehicle industry. Macroeconomic factors impacting growth stocks also play a role.

Growth Trajectory

The ETF's growth trajectory depends entirely on the demand for inverse TSLA exposure. Changes in TSLA's stock price and volatility will significantly influence trading volume and AUM.

Competitive Edge

TSDD's competitive edge lies in offering a higher leverage factor (1.5x) compared to some other inverse TSLA ETFs, attracting investors seeking more aggressive short exposure. This higher leverage can amplify returns (and losses). However, it also requires a very short-term investment horizon due to the effects of compounding and daily resets. Its focus on a single stock makes it highly specialized.

Volatility

The ETF exhibits high volatility due to its leveraged nature and the underlying volatility of TSLA stock.

Market Risk

The ETF is subject to significant market risk, as its performance is directly tied to the price movements of TSLA. Unexpected positive news or events could lead to substantial losses.

Ideal Investor Profile

The ideal investor is a sophisticated, short-term trader with a strong understanding of leveraged ETFs and a bearish outlook on TSLA. They should be comfortable with high volatility and the potential for significant losses.

Market Risk

The ETF is best suited for active traders with a very short-term (daily) investment horizon. It is not suitable for long-term investors due to the effects of compounding and daily resets.

The GraniteShares 1.5x Short TSLA Daily ETF (TSDD) provides 1.5 times the inverse daily performance of Tesla (TSLA) stock, targeting short-term traders who believe TSLA's price will decline. It utilizes derivatives to achieve its leveraged inverse exposure, making it a high-risk, high-reward investment vehicle. Due to the daily reset feature, it's unsuitable for long-term holding and requires continuous monitoring. While it can offer amplified profits from a TSLA price decrease, it can also lead to substantial losses if TSLA's price rises.

Data Sources:

• GraniteShares official website
• ETF.com
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investing in ETFs involves risk, including the possible 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.