When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
TAKE PROFITS
SELL the Tesla (TSLA) October 2024 $200-$210 in-the-money vertical bull call debit spread at $9.10 or best
Closing Trade
10-14-2024
expiration date: October 18, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
We are getting too close to our upper strike to risk holding this position for 4 more trading days. There is not enough time left for things to go wrong and then go right again.
We are close to our breakeven on this trade. With the Mad Hedge Market Timing Index at a lofty 64, I will be quick to take profits.
Therefore, I am selling the Tesla (TSLA) October 2024 $200-$210 in-the-money vertical bull call debit spread at $9.10 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.
In what was the most hyped corporate event of the year, Elon Musk finally brought out his Tesla Robotaxi (TSLA). The shares had risen 40% in expectation of the show.
For sheer entertainment value, he did not disappoint, delivering a sophisticated production worthy of the Hollywood where it took place. He brought 50 Robotaxis with him to give rides to party guests in a Warner Brothers simulated city. Musk, who arrived at the stage in one of the robotaxis - called a Cybercab - said production will start in 2027.
They will cost 20 cents a mile to operate. The vehicle will eventually be for sale for under $30,000. Optimus robots served drinks, and the entire event was covered by video drones. The Robotaxis use Inductive charging where they just park over pad and it get wirelessly recharged.
While Elon certainly can put on a show, hard data on future sales and profits were completely missing in action. Nor was there any news about the next generation Model 2, thought to be the next leapfrog in Tesla profits. With profits for the project not arriving until 2028, it all amounted to a 19% SELL from the recent $265 high.
This sets up a new test of the $202 moving average best case, and the old $170 low worse case. Long-term we go to new highs as the AI value of the company realized. The company is making progress on all its products. One drag on the stock will be Musk’s new bromance with Donald Trump. Your classic Tesla EV buyer is not exactly a Trump supporter.
With this trade, I was willing to bet that Tesla shares would not fall below $210 by the October 18 option expiration in 24 trading days.
Tesla will remain the top EV maker for the next decade easily.
Here are the specific trades you need to exit this position:
Sell 12 October 2024 (TSLA) $200 calls at………….....…..….…$20.00
Buy to cover short 12 October 2024 (TSLA) $210 calls at…….$10.90
Net Proceeds:…….................…………….……….………………………$9.10
Profit: $9.10 - $8.80 = $0.30
(12 X 100 X $0.30) = $360 or 3.4%
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.
Don’t execute the legs individually, or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.