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) - BUY
BUY the Tesla (TSLA) December 2018 $400-$430 in-the-money vertical BEAR PUT spread at $26.50 or best
Opening Trade
11-12-2018
expiration date: December 21, 2018
Portfolio weighting: 10%
Number of Contracts = 4 contracts
I firmly believe that Tesla shares will rise tenfold from the current level over the next decade, making it the world’s largest car maker.
After all, I just bought my third one, a fully tricked out Model X P100D. I believe I am one of the oldest continuous Tesla Owners in existence, having picked up one of the first Tesla Model S’s in 2009. I’ll never buy another car.
The company has just enjoyed a rare spate of good news. Robyn Denholm, the finance chief at Australian telecom firm Telestra, has been brought in as the new chairman at Tesla. Now we have a supervising adult over founder Elon Musk. At last, Elon can focus solely on building electric cars. Maybe he can get some sleep too.
The Fremont, CA company has been beating its production target for the new Tesla 3, now over 6,000 units a week. A massive short covering rally has taken the stock close to a new all-time high. Consumers are accelerating orders to beat the expiration of the $7,500 electric car tax credit at the end of the year.
However, this tenfold move is not going to happen just yet. The stock is now at the top of a two-year trading range. Enormous new short selling is kicking in as we approach the old high at $394. The stock has moved too far, too fast. Tesla was virtually the only stock that went UP during the October crash.
There, I am buying the Tesla (TSLA) December, 2018 $400-$430 in-the-money vertical BEAR PUT spread at $26.50 or best.
Don’t pay more than $28.00 or you’ll be chasing.
This is a bet that Tesla shares will not rise above $400 by the December 21 option expiration in 33 trading days. That is up $49.49, or 14.11% from the current level.
If you don’t do options stand aside. You never want to bet against the long-term trend of a great company by selling short shares here.
Here are the specific trades you need to execute this position:
Buy 4 December 2018 (TSLA) $430 puts at………….………$77.00
Sell short 4 December 2018 (TSLA) $400 puts at………….$50.50
Net Cost:………………………….………..………….…...
Potential Profit: $30.00 - $26.50 = $3.50
(4 X 100 X $3.50) = $1,400 or 13.20% in 33 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don’t get it done, don’t worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
