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.
Trade Alert - (TSLA) - STOP LOSS - SELL
Sell the Tesla (TSLA) February 2025 $310-$320 in-the-money vertical bull call debit spread at $8.80 or best
Closing Trade
2-11-2025
expiration date: February 21, 2025
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
I can recognize a free fall when I see one. Since December 18, Tesla shares have collapsed $147, or 30%. Elon Musk may soon no longer be the richest man in the world.
It is undeniable that Elon Musk’s Washington activities are distracting from the management of the company. Currently, the company is suffering from plunging sales in the US, China, and Europe. In hugely uncertain and volatile times like these, risk control is the order of the day and it is easier to dig yourself out of a small hole than a large one.
I am therefore stopping out of my position in Tesla close to cost.
Therefore, I am selling the Tesla (TSLA) February 2025 $310-$320 in-the-money vertical bull call debit spread at $8.80 or best.
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.
If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $8.80, $8.70, $8.60, $8.50, and $8.40. You should get done on some or all of these.
With this trade, I was willing to bet that Tesla shares would not fall below $320 by the February 21 option expiration in 20 trading days.
Here are the specific trades you need to exit this position:
Sell 12 February 2025 (TSLA) $310 calls at………………….......…$37.00
Buy to cover short 12 February 2025 (TSLA) $320 calls at…….$28.20
Net Proceeds:………………….……….…………..................…….………$8.80
Loss: $9.00 - $8.80 = -$0.20
(12 X 100 X -$0.20) = -$240.
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.