Tesla’s upcoming S&P 500 debut fuels ‘crazy’ trading volume


Shares in Tesla rose almost 3% on Wednesday and have now surged 40% since 16 November, when it was announced the electric car maker would join the S&P 500 in December. Investors rushed to buy shares ahead of index funds that will be forced to acquire over US$50-billion of its shares.

One of Wall Street’s most loved — and hated — stocks, Tesla was already the US stock market’s most traded companies by average daily value, but trading has surged in recent sessions, along with Tesla’s stock price.

“It’s been crazy. Since Tesla’s (announced) inclusion in the S&P, you’ve had a lot of managers out there that didn’t own enough of it having to buy more,” said Sahak Manuelian, MD of trading at Wedbush Securities.

Traders bought and sold an average of nearly $26-billion of Tesla shares per session over the five days ending on Tuesday

Retail investors using apps like Robinhood are also responsible for much of the recent volume spike, Manuelian added.

Traders bought and sold an average of nearly $26-billion of Tesla shares per session over the five days ending on Tuesday, accounting for almost 8% of all stock traded on US exchanges, according to Refinitiv data. That is more than the combined value of trades in and Apple over the same period.

Up over 400% in 2020, Tesla has become by far the world’s most valuable automaker, despite production that is a fraction of Toyota’s, Volkswagen’s General Motors’.


Over the past year, Tesla has averaged over $16-billion/day in trades, followed by Apple, at about $14-billion, according to Refinitiv data.

Trading in Chinese electric vehicle maker Nio has also surged in recent weeks, with its shares nearly doubling in November.

Including Nio, trading of stocks in the nascent electric vehicle industry reached an average of $38-billion/day in the past five sessions, accounting for 12% of all trading on US exchanges. By comparison, traders in the same period bought and sold each day about $8-billion worth of oil and gas stocks including Exxon Mobil and Chevron.  — Reported by Noel Randewich, (c) 2020 Reuters


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