Tesla shares in the S&P 500

Tesla shares will officially take the fifth spot on Monday's list of the largest-cap stocks in the S&P 500 benchmark index. On Tesla's first day of trading in the S&P 500, some investors decided to "lock in profits" by selling heavily-valued shares.

Tesla (TSLA) shares will start trading on Monday, weighing in at 1.69% on the broad benchmark S&P 500 index, which includes stocks of the 500 largest-cap companies in various industries.

Tesla's market value has jumped strongly this year with the stock up more than 730%. Starting 2020 with a share price of about $84 and a market capitalisation of about $75.5bn, it closed Friday with a price of $695 and a market capitalisation of almost $622bn.

By ramping up production and opening a plant in China, Tesla has managed to post five consecutive quarters of profits. Along with its sharply increased capitalisation, this has given the company a shot at inclusion in the S&P 500 index. The success story and demand for Tesla stock also stood out strongly against the backdrop of the overall COVID-19 pandemic crisis and the severe decline in sales of manufacturers of cars with internal combustion engines. In contrast, the electric car market, dominated by Tesla, rose thanks to increased demand.

Tesla shares traded in huge volume on Friday and hit a new high. More than 200 million Tesla shares changed hands in a single trading session, more than four times the average 30-day trading volume.

Tesla shares were fifth on the S&P 500 index list with a high weighting of 1.69%, ahead of Alphabet (GOOG, GOGL) and following Facebook (FB).

Tesla's jump of almost 6% on Friday was largely expected as passive fund managers and managers of various investment companies using the S&P 500 as a benchmark had to buy Tesla shares.

Experts also noted an increase in speculation among investors betting on the short term.

Although Tesla regularly performs above Wall Street expectations, sales of its vehicles are skyrocketing and the company is expanding with new plants around the world, Tesla's share price has reached levels that are becoming increasingly difficult to justify.