Asgard Credit Fund CIO on Buying Tesla Default Swaps

The video discusses the strategy of shorting Tesla's credit while avoiding shorting its stock or convertible bonds due to high risk. The speaker explains the mechanics of the trade, focusing on the credit market's pricing and the potential mispricing compared to the stock market. The catalyst for the trade is a positive view on the auto sector's credit market, with a balanced approach to avoid excessive risk. The video also analyzes Tesla's recent market rally, attributing it to factors like a potential short squeeze, profits, and new developments in China. The future of Tesla is seen as binary, depending on the dominance of battery-driven vehicles.

What factors are contributing to the rally in Tesla shares according to the discussion?

Discuss the potential risks to Tesla's business model as mentioned in the text.