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) – SELL – TAKE PROFITS
SELL TAKE PROFITS Tesla, Inc. (TSLA) May 2022 $690-$720 in-the-money vertical BULL CALL spread at $28.00
Closing Trade
5-3-2022
expiration date: May 20, 2022
Portfolio weighting: 10%
Number of Contracts = 4 contracts
This was a tactical trade in Tesla (TSLA) that the underlying TSLA stock would stay above $720 in the next 24 days.
After an 11% selloff in TSLA from Jan highs, we executed this call spread, and truth be told, there’s been a lot of volatility since we executed this and rightly so as the headline risk for TSLA continues to be elevated.
After Founder Elon Musk announced that he was done selling TSLA stock to fund his purchase of Twitter, the stock has enjoyed a nice little bump.
However, this leads me to believe that if Musk’s deal doesn’t go according to plan and external financing falls through, he could sell more TSLA stock to accommodate his new foray into social media.
I am comfortable with leaving some money on the table here and it’s the right thing to do after my correct call against Chinese tech turned sour after the Chinese communist party intervention.
This puts us back on the right track in a rocky tech market, to say the least.
Here are the specific trades you need to execute this position:
Sell to Close 4 May 2022 (TSLA) $690 calls at….………$225.00
Buy to Close 4 May 2022 (TSLA) $720 calls at………….$197.00
Net Proceeds:……………………..……...….......……..…….....$28.00
Profit: $28-$25 = $3.00
(4 X 100 X $3) = $1,200 or 12.00%
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.
