The 5 best ETFs to short Tesla stock in 2025:

There are a number of ETFs that allow investors who are bearish on Tesla to benefit from TSLA decreasing in price.

There are a number of ETFs that allow investors who are bearish on Tesla to benefit from TSLA decreasing in price. We’re highlighting the best ETFs to short Tesla stock to give you an overview of what’s available on the market.

However, there are quite a few caveats when it comes to ETFs that are short on Tesla. Unlike traditional ETFs, these ETFs are not designed for long-term holding. If you are going to trade them, you must actively monitor and manage your portfolio to avoid substantial losses.

Before we begin with our list of the best ETFs to short Tesla, let’s quickly go over the concept of inverse ETFs.

The 5 best ETFs to short Tesla stock in 2025:

When we think of ETFs, we typically think of them as products that allow investors to benefit from the success of companies. However, there are also ETFs that are designed to do the opposite, bringing investors profits when the price of a certain stock or other asset declines.

There are many terms used to refer to such ETFs – examples include “inverse ETF”, “short ETF” or “bear ETF”. These ETFs utilize various financial derivatives such as swaps and options in order to turn a profit when the value of their underlying benchmark declines.

Purchasing shares in an inverse ETF is an alternative to other ways of going short on a stock or other asset, such as futures contracts or put options.

When considering inverse ETFs, it’s important to understand that these ETFs tend to have significantly higher expense rates than traditional ETFs. In addition, inverse ETFs are not designed for long-term holding, as they are meant to be used as a vehicle for short-term trades.

Inverse ETFs are high-risk products, and the risk increases further when it comes to inverse ETFs that provide leveraged exposure. In addition, inverse ETFs that only track a single stock don’t provide any benefits of diversification.

If you are unsure about the way inverse ETFs function, you should avoid trading them.

Exploring the best ETFs to short Tesla stock

Now, let’s take a closer look at the list of the best ETFs to short Tesla stock. We’ve made sure to highlight ETFs from a variety of issuers and have provided options for traders with varying risk appetites.

1. Direxion Daily TSLA Bear 1X Shares (TSLS) – An ETF to short Tesla

Direxion Daily TSLA Bear 1X Shares (TSLS) is an ETF that aims to provide daily inverse results of Tesla stock. To achieve this, the fund invests in financial instruments such as swaps and options.

This ETF pursues a daily investment objective, which means that investors shouldn’t expect it to track the (inverse) performance of TSLA shares over any period of time that’s longer than one day.

Like most other inverse ETFs, TSLS has a fairly high expense ratio of 1.07% and is not designed for long-term holding periods. The fund is best used for short-term short positions when the investor is bearish on TSLA, or as a short-term hedge.

2. AXS TSLA Bear Daily ETF (TSLQ) – Inverse TSLA ETF for Tesla bears

AXS TSLA Bear Daily ETF (TSLQ) is an ETF that seeks to provide inverse investment results (-200%) based on the daily performance of TSLA stock.

Similarly to the TSLS ETF, we’ve featured above, the TSLQ ETF is also designed for short-term trades and not long-term holding. The two funds are extremely similar in terms of what they provide to investors, but we gave the nod to TSLS since TSLQ has a higher expense ratio of 1.15%.

3. Xtrackers ShortDAX x2 Daily Swap UCITS ETF 1C – A 2x leveraged inverse ETF that tracks the DAX index

Xtrackers ShortDAX x2 Daily Swap UCITS ETF 1C is a leveraged inverse ETF that provides twice the inverse daily performance of Germany’s DAX index. This means that for every 1% drop in the DAX on a given trading day, the ETF aims to rise by 2%, and vice versa. The fund achieves this inverse exposure through swap agreements, making it a synthetic ETF rather than a physically backed one.

Due to its leveraged nature, this ETF is best suited for short-term trades rather than long-term investing. Like other inverse ETFs, its performance can deviate from expectations over extended periods due to daily rebalancing and compounding effects.

With its focus on the DAX, this ETF provides an alternative for traders seeking to short the German stock market instead of individual stocks like Tesla, which represents 2.54% of the fund. However, investors should be aware of the risks associated with leveraged ETFs, including increased volatility and higher expense ratios.

4. T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ) – A