Are you considering the merits of an investment in Elon Musk’s eco-conscious automotive company? Before you take the plunge, it’s a good idea to research your options. We’ve produced this page, along with many more educational articles, to guide you on your journey towards becoming a successful stock investor.
If you’re ready to buy Tesla shares, follow our step-by-step guide. If you don’t feel you’re quite ready yet, read on and we’ll take you through the fundamentals.
Buy Tesla stock, right now
Ready to invest in Tesla shares? Click on the links below to choose the online broker that makes the most sense for you. Our helpful guides analyse the best investment choices, and explain how they work.
Trade Tesla shares, right now
Looking for quick returns? You may prefer to trade shares in Tesla. The goal of trading is to make shorter-term profits by buying Tesla shares and selling in a short amount of time, sometimes the same day. We’ve reviewed the best low-fee online brokers for frequent trading.
How to buy Tesla shares in 7 simple steps
Ensuring your investment in Tesla shares is a smart move requires hard work and study. Take your time evaluating the stock and prices, then choose how you want to buy Tesla shares.
You can start buying stocks online with a small amount of capital. As you gain experience, you might then decide to raise the amount of money you’re willing to risk and try more complicated methods of trading. Here’s a quick checklist to follow as you consider buying Tesla shares.
- Research the company. What is Tesla? How did the company get its start? How did it build momentum? Is Tesla growing its revenue and earnings? How are customers responding to Tesla’s products? The more you know about the company, the better equipped you’ll be to make smart investing decisions.
- Learn the basics. This includes all the terminology that comes with buying shares, such as bid price and ask price, revenue growth and earnings growth. It also includes the different ways you can invest in a company, including share-dealing, trading and contracts for difference (CFDs).
- Share-dealing vs Trading. In share-dealing, you’re buying shares in a company. You can make money from share-dealing in two different ways: Sell shares at a higher price than when you bought them, or by collecting dividends (assuming it’s a company that shares its profits by issuing dividends). Trading refers to a shorter-term approach to investing, potentially buying and selling shares on the same day (day trading). If you day trade Tesla shares you’re better off scrutinising the company’s chart than worrying about Tesla’s long term prospects.
- Decide your budget. When you first start investing in stocks, it’s a good idea to start with a smaller budget of, say, £1000-£2000. With Tesla trading around $425 a share, you might consider just buying a few Tesla shares. As you gain experience, you can ramp up the size of your trades.
- Choose the best broker. Many different online stockbrokers can provide a platform to sell and buy Tesla shares. Many of those brokers will only charge a few dollars per trade. Find a broker with an easy-to-use trading platform, a strong reputation and low fees.
- Assess market conditions. When the stock market rises sharply for an extended period of time (a ‘bull market’), most individual stocks rise (including Tesla stocks and shares). When the stock market falls sharply (a ‘bear market’), most individual stocks fall. Don’t try to fight the direction of the market.
- Make your first investment. You’ve learned all about Tesla’s business, as well as the basics of stock investing. You’ve established a budget, found a broker you like, and ensured that the market is in good shape. Time to invest. Log onto your online brokerage account, type in Tesla’s ticker symbol (TSLA), make sure that the price of Tesla’s shares isn’t prohibitive, then hit the Buy button. Within seconds, you’ll own Tesla shares.
Ways to invest in Tesla – share-dealing vs trading
There are multiple ways to buy, sell, and trade shares in Tesla online. Here are some options:
When share-dealing, an investor simply buys shares in a company with the expectation that they will rise in value. Share-dealing is usually a longer-term approach.
- Pros: No need to master chart-reading and technical analysis. If Tesla’s stock consistently goes up in value, holding for a longer period of time could result in a big gain.
- Cons: When share-dealing, you’re likely to tie up your money for a long time, meaning it won’t be free for further investments. If Tesla’s stock starts falling sharply right after you buy, it could be tough to sit through a major correction.
A CFD is a contract for difference. CFDs are investment derivatives that enable you to speculate on the price movement of an asset (forex, commodities, Tesla’s stock) without actually owning that particular asset (in this case, shares in Tesla).
- Pros: With a CFD, you can use leverage trading, which is when you only need to put up a percentage of the total trade value – with the broker providing the rest – since you’re trading with leverage. If shares in Tesla rise in value, you’ll reap a bigger gain than if you only ventured your own money.
- Cons: Just as trading with leverage equals a bigger gain if Tesla’s stock rises, you also stand to lose more if the stock falls. If you leave a leveraged CFD position open for more than a day, you’ll likely have to pay overnight fees. While CFD trading makes sense as a hassle-free alternative to storing gold bars or stacks of currency, it often makes less sense when trading stocks. This is because you lose the voting rights and the potential dividends that can come with owning shares.
The more knowledge you have, the better your odds of making money by investing in or trading Tesla stock. Read our guides and courses to get prepared. If you’re ready to give it a go, click on the links above.
How to buy, sell and trade Tesla shares for beginners
Let’s revisit some key points you really need to know before entering the shares market.
This typically involves using an online broker. Buying shares is smart for investors who want to hold for long periods of time. Log in to your online brokerage account, type in the ticker symbol of the stock you want to purchase (Tesla’s is TSLA), click Buy, and within a couple of seconds you’ll have those Tesla shares.
When selling shares, the aim is to do so at a higher price than the one at which you bought, thereby earning a profit. You might decide to hold for an extended period – years, maybe even decades – hoping to achieve the biggest profit possible. On the other hand, you may see that Tesla’s stock has already earned you a healthy profit and decide that the stock market is starting to weaken. In such a scenario it might make sense to sell and protect your profits.
You can trade shares through conventional methods or by using a CFD broker. If you choose a CFD broker, know the risks that come with leveraged trading and don’t forget the extra fees CFD brokers charge.
Our top tips for investing in shares of Tesla
You now have a broad overview of how to invest in Tesla. Here are some key points to remember:
- Know your budget. Don’t invest more than you can afford to lose. While investing can be profitable, you don’t want to jeopardise your financial well-being.
- Choose the approach that makes the most sense for you. Make sure the investment strategy you choose fits your investment goals and risk tolerance. As you gain experience, you’ll become better equipped to try more complex methods of investing.
- Stick to a logical plan, and don’t get swayed by emotion. A sound plan will make it more likely that you’ll be successful. Letting emotions like fear and greed govern your decision-making can lead to bad outcomes.
- If market conditions change, be ready to react. When the stock market falls, you don’t need to sit there helplessly and absorb the blow. Keep prevailing market conditions in mind when making investing decisions.
- Learn from your mistakes. Everyone makes investing mistakes, from beginners to experts. When you make a mistake figure out what went wrong, and how you can improve. That way you can apply those lessons in the future, and achieve better results.
Unsure which platforms to use?
Don’t know where to go from here? No problem. Here’s a list of factors to consider as you decide what to do next:
- Budget size. If you have a budget of a couple thousand dollars or less, keep things simple by just a few shares of Tesla, seeking a profit when you sell. If you have a larger budget (e.g. more than £10,000), you have more options to work with, including day-trading, CFD trading, or simply buying a higher number of shares.
- Risk assessment. As you gain experience, you’ll become less frightened of risk. Take the time to learn and more complex investing options will start to become viable options for you. For instance, you can choose to sell shares in Tesla short. When you short-sell shares you’re betting that the price will fall. Learning to protect your investment with a stop-loss order is another invaluable strategy. If you buy shares in Tesla at $425 per share, you could put in a stop-loss order at $382.50. That way, if Tesla’s stock starts falling, you won’t lose more than 10% on your investment.
- Market conditions. If stocks tumble into a declining (bear) market, defensive investment strategies such as bonds or commodity investing could make more sense than buying growth stocks like Tesla. On the flip side, if the market’s performing well, you might opt to take advantage by buying shares in Tesla. Follow the latest stock market news right here on our site.
- Know your investing goals. If you want to make money quickly, learn about faster-moving trading techniques, such as day-trading (buying and selling shares on the same day). If your timeframe is more like 20 years, you might prefer to simply buy Tesla shares then trust that the company will remain strong for decades to come.
- Keep track of emerging trends. When technology evolves, exciting new investment opportunities tend to follow. Increased focus on the environment has heightened demand for electric cars, making Tesla’s products more attractive. That said, Tesla has plenty of competitors. If one of them leapfrogs Tesla’s electric car offering, the company’s market leadership could become threatened.
What is Tesla?
Tesla is an American automotive and energy company, producing some of the most popular electric cars on the market. The company has expanded over the past few years, introducing new car models and enhancing the technology in each car. For more information on Tesla, Tesla share prices & Tesla stocks, including charts, live prices, analysis, and more, visit our Tesla stock price page.
Try some of our stock market courses for beginners
Still not feeling ready? Start on our site, where you can learn about stock investment fundamentals with our easy-to-understand educational courses. Learning the best techniques for investing will help prepare you for buying shares of Tesla.