As Tesla's (TSLA.O) stock price fell following a weaker-than-expected earnings report, investors poured into a leveraged exchange traded fund that bet on upside in the company's shares. According to Lipper data, the Direxion Daily TSLA Bull 1.5X Shares ETF (TSLL.O), the largest single-stock ETF for bullish wagers on Tesla's shares, witnessed net daily inflows of …
As Tesla’s (TSLA.O) stock price fell following a weaker-than-expected earnings report, investors poured into a leveraged exchange traded fund that bet on upside in the company’s shares. According to Lipper data, the Direxion Daily TSLA Bull 1.5X Shares ETF (TSLL.O), the largest single-stock ETF for bullish wagers on Tesla’s shares, witnessed net daily inflows of $24.9 million on Thursday.
The inflows occurred as the $833 million fund, which tries to replicate 150% of Tesla’s daily stock price performance, plunged 14% on Thursday, while Tesla’s shares sank 9.3% to a two-month low the day after CEO Elon Musk warned that high interest rates could stifle demand for electric vehicles. The fund’s shares were down 4% on Friday.
“Tesla has its fair share of bulls – and bears – so I’m guessing the bulls are attempting to view this earnings release as a speed bump and using any weakness here to add exposure to positions,” said Todd Sohn, ETF and technical strategist at Strategas Securities.
The leveraged Direxion fund has received $501 million in net inflows this year and has more than quadrupled in price year to date. Tesla’s stock is risen 72.3% this year.
According to Vanda Research, Tesla was also the most-bought stock among retail traders on Thursday, with net purchases totaling $159.5 million. On the other hand, the $58 million Direxion Daily TSLA Bear 1X Shares ETF (TSLS.O) and the $109.6 million AXS TSLA Bear Daily ETF (TSLQ.O) both witnessed net outflows of more than $1 million.
Both funds gained more than 9% on Thursday and 2.4% on Friday. On Thursday, Rex Shares and Tuttle Capital Management introduced a suite of hyper-levered single-stock exposure funds, including the T-REX 2X Long Tesla Daily Target ETF (TSLT.O) and the T-REX 2X Inverse Tesla Daily Target ETF (TSLZ.O).
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