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Investors experiencing the fear of missing out, or FOMO, can still buy Tesla shares if they think that global sales of electric vehicles are at an inflection point.

Tesla (ticker: TSLA) stock has been on an incredible run since the company reported better-than-expected third-quarter earnings in late October. Shares are up more than 100% over the past three months, crushing comparable returns of the S&P 500 and Dow Jones Industrial Average. Tesla shares were up 3.2% Tuesday afternoon to more than $540.

It would be understandable if investors watching from the sidelines are feeling as if they missed out on the next big thing. Whats more, those without a stake in Tesla might be reluctant to buy at current levels, thinking that would be a recipe for portfolio disaster. No one wants to buy high and sell low.

But, as one portfolio manageran off-again, on-again Tesla shareholdertold Barrons, investors can still buy in, so long as they believe in the long-term prospects for the company. They key is to manage risk. And risk with a stock as volatile as Tesla can be mitigated by position size.

Tesla shares are about twice as volatile as, say, Apple (AAPL) stock.

Investors can buy a very small position, then add to it when shares dip and sell some when shares rise. Investors dont have to take an all-or-nothing view with any portfolio position. And keeping some stock forces an investor to maintain focus on the business fundamentals. It also cures FOMO.

On the flip side, short sellers have to have an iron stomach to say short Tesla stock these days. Bearish investing pros can go short by borrowing and selling shares, betting on near-term price declines. But the Tesla short isnt working, to say the least. The recent rally is, in industry parlance, ripping the face off the shorts.

In fact, Tesla has been tough for short sellers for a while. Data analytics provider S3 estimates short sellers have lost more than $11 billion since 2016 betting against the company and its enigmatic CEO, Elon Musk.

But the short sellers are still there. Tesla is the second largest short in the domestic market behind Apple, S3 wrote in a Tuesday research report. S3 is talking in absolute termsthe amount of money sold short.

About $13 billion worth of Tesla shares are shorted, according to S3. That is almost 13% of its market value. Apple, however, is more than 13 times the size of Tesla measured by market capitalization. Only about 1% of Apple shares available for trading are sold short. It is a tiny amount, relatively speaking. There are, essentially, no Apple bears in the marketplace. By comparison, about 20% of Tesla shares available for trading are sold short, and there are plenty of Tesla bears.

High short interest can lead to a short squeezewhen bearish investors rush to cover positions en masse. Short covering is one explantation for the magnitude of the recent Tesla rally. But that isnt the only factor driving shares higher.

Its a short squeeze, but also real buying on a global EV inflection point, Wedbush analyst Dan Ives said in an interview. With China growing, electric vehicles will constitute 8% of global auto sales by 2024, up from 3% today, he said. Thats the key for Musk and Fremont. (Fremont, Calif., is where Tesla has its headquarters.)

Ives sees bullish Tesla investors trimming positions as the stock price rises. But he said there are other investors doubling down on a China Tesla thesis.

The company just started delivering Model 3 sedans produced in China for the Chinese market. The lower price point for the Model 3versus the Model X or Model S vehiclesalong with local tax and EV incentives in the country should help Tesla volumes there in 2020.

Bulls can stay invested, to some extent, but China is key to the bullish investment thesis now.

Write to Al Root at allen.root@dowjones.com

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