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) – SELL
Sell the Tesla (TSLA) April $310-$320 in-the-money vertical bear put debit spread at $8.50 or best
Closing Trade
3-27-2025
expiration date: April 17, 2025
Portfolio weighting: 10% weighting
Number of Contracts = 13 contracts
I’m sorry, but the heat in the kitchen is getting too hot for me.
Tesla has resorted to making a news announcement a day, even though nothing is actually happening in the company right now. Elon Musk knows that hedge fund algorithms will pick these up and automatically drive the stock up, squeezing the shorts.
Today’s announcement is that Tesla will start selling cars in Saudi Arabia. I doubt there will be many cars sold in a country where gasoline is 25 cents a gallon.
The right-wing echo chamber is also making a concerted effort to talk Tesla shares up. Last night, Fox News ran a special on Tesla, extolling its long-term possibilities. This is in of the monthly sales figures out next week that are likely to be catastrophic.
Elong Musk is a master at engineering short squeezes like this as he did the many times Tesla almost went bankrupt. He got the president to claim he was buying one, with a Model S displayed on the White House lawn. The commerce secretary got his old firm Cantor Fitzgerald to recommend the stock, even though it has no coverage of the company and is a bond house.
Never before has the White House so aggressively promoted a publicly listed company.
Normally, the SEC would be prosecuting all of these activities for securities fraud. But the SEC has suddenly gone missing or is promoting crypto currencies. The country has become lawless.
Eventually, Tesla shares will face the reality of collapsing sales, European boycotts, tariffs, and a recall of 45,000 of its flagship Cybertrucks. Talk alone can only get the stock so high.
Fortunately, the loss on the position will be more than offset by the very deep in-the-money long we also have in Tesla. The upside hedge worked.
The key to this market is to stop out with only small losses, not big ones.
Therefore, I am selling the Tesla (TSLA) April 2025 $310-$320 in-the-money vertical bear put debit spread at $8.50 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.
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 $8.50, $8.40, $8.30, $8.20, and $8.10. You should get done on some or all of these.
With this trade, I was willing to bet that Tesla shares would not rise above $310 by the April 17 option expiration in 25 trading days.
Here are the specific trades you need to exIT this position:
Sell 13 April 2025 (TSLA) $320 puts at……………….……..…$46.00
Buy to cover short 13 April 2025 (TSLA) $310 puts at…….$37.50
Net Proceeds:………………………….……….………..…….…………$8.50
Loss: $8.50 – $8.50 = $0.00
(13 X 100 X $0.00) = $0.
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.