When John identifies a strategic exit point, he will send you an alert with specific trade information on 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.
(TSLA) – TAKE PROFITS
SELL the Tesla (TSLA) August 2024 $150-$160 in-the-money vertical bull call debit spread at $9.95 or best
Closing Trade
8-8-2024
expiration date: August 16, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
Monday morning now seems like a million years ago.
Tesla shares are now a humongous $36 off the Monday low. As a result, we now have 95% of the maximum potential profit in hand. The risk/reward of continuing is no longer favorable. In this market, you take the 95% profit.
It is extremely rare to trade with a Volatility Index ($VIX) of $56 and a Mad Hedge AI Market Timing Index of 19. I can really only count the occasions on one hand.
So I felt free to dive in on the long side after a whopping great $90, or $33% drop in Tesla stock. At 44% it has one of the highest implied volatilities in the market. These strike prices were a further 15% lower, so you had a big safety cushion.
Therefore, I am selling the Tesla (TSLA) August 2024 $150-$160 in-the-money vertical bull call debit spread at $9.95 or best.
As a result, you get to take home $1,620 or 15.70% in 3 trading days. Well done and on to the next trade.
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 5 cents with a second order.
Elon Musk really checkmated the rest of the EV industry with his massive price cuts and buyer incentives, which is 35% after adding in newly qualifying government subsidies.
Tesla Q2 sales came in better than expected but are still down YOY, delivering 444,000. The Chinese government recently approved Tesla cars for purchase. Tesla has recently been rediscovered as one of the cheapest AI plays out there.
Don’t get me wrong. I still love Tesla for the long term and expect it to reach $1,000 someday. This is just a summer short-term options trade.
Put spreads this far in the money trade all over the map but give this your best shot.
Tesla shares plunged last year because Elon Musk sold an additional $3.6 billion worth of shares in December, bringing his total for the year to a mind-numbing $40 billion, according to SEC filings.
With this trade, I am willing to bet that Tesla shares will not fall below $160 by the August 16 option expiration in 6 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 August 2024 (TSLA) $150 calls at………………….......…$44.00
Buy to cover short 12 August 2024 (TSLA) $160 calls at….….$34.05
Net Proceeds:………………….……….………………..….................…$9.95
Profit: $9.95 - $8.60 = $1.35
(12 X 100 X $1.35) = $1,620 or 15.70% in 3 trading days.
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.
