Retail investors jumped headfirst into Tesla stock on Thursday after shares plummeted 14.3% amid a high-profile fallout between U.S. President Donald Trump and Tesla CEO Elon Musk. The sharp decline marked Tesla’s 11th worst single-day loss since going public in 2010.
Despite the chaos, everyday investors viewed the drop as a buying opportunity. According to Reuters, retail traders invested $201.3 million into Tesla stock on Thursday, contributing to $2.6 billion in total trading volume and making it the second-most purchased stock by individual investors that day.
The market turbulence followed a very public breakdown between Trump and Musk. After a heated exchange on their respective social media platforms, Trump—now back in the Oval Office—threatened to cancel all federal contracts tied to Musk’s companies. The clash escalated after Musk criticized Trump’s tax policies, ending what had once been a seemingly amicable alliance.
Yet small-time investors didn’t flinch.
“Tesla has long been a favorite among retail traders, and a 14% drop is seen as a major buying opportunity,” said Marco Iachini, SVP of research at Vanda Research.
Retail enthusiasm extended beyond just Tesla shares. Traders also funneled $41.5 million into the Direxion Daily 2x Bull ETF (TSLL.O), a leveraged fund that profits from Tesla’s upside, signaling bullish sentiment even as the stock was falling.
The options market showed a similar sense of calm. Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, said there was no sign of panic. Instead, traders were selling put options—a strategy often seen as a vote of confidence that a stock won’t fall much further. Tesla’s implied volatility did spike to 77, the highest in six weeks, but remained well below April’s peak of 106.1.
By Friday, Tesla shares had rebounded 5.6% to $299.14, and volatility eased back to 68.
Retail investors’ aggressive buying helped fuel the rebound, and their optimism was echoed across platforms like Reddit and X. Iachini noted a strong wave of online support: “The dominant sentiment is clear—buy the dip.”
Tesla has long been a retail investor darling. After Trump’s election victory last November, the stock surged 90% in just six weeks. Even after falling 37% from its December high, retail traders continue to hold the line—and buy more.
Their Thursday response made one thing clear: loyalty to Tesla remains strong, even in the face of political risk and market turbulence.
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