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.
Tech Alert - Tesla, Inc. (TSLA) – BUY
BUY Tesla, Inc. (TSLA) June 2022 $545-$570 in-the-money vertical BULL CALL spread at $20.00
Opening Trade
5-16-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 5 contracts
This is a tactical trade in EV automaker Tesla (TSLA) that the underlying TSLA stock will stay above $570 in the next 32 days.
We took profits in TSLA last time and rightly so as the underlying stock rolled over literally the next day.
The markets are that finicky now.
The stock has gotten hammered and is down 35% since its recent short-time high on April 4.
Musk’s TSLA stock has gotten layered into the Twitter story and if Musk can finagle a cheaper deal, then TSLA will run to the upside.
And if the deal falls apart, it means less liability for TSLA shareholders and only a $1 billion penalty for Musk and even in this case, TSLA shares will rebound.
More aggressive traders can move strike prices up or long term investors should buy and hold here.
Here are the specific trades you need to execute this position:
Buy 5 June 2022 (TSLA) $545 calls at………….………$203.00
Sell short 5 June 2022 (TSLA) $570 calls at………….$183.00
Net Cost:……………………..….............….………..…….....$20.00
Potential Profit: $25 - $20 = $5
(5 X 100 X $5) = $2,500 or 25.00% in 32 days
If you are uncertain on 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.
