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.
Buy the Tesla (TSLA) December 2024 $270-$275 in-the-money vertical bull call debit spread at $3.90 or best
Opening Trade
11-12-2024
expiration date: December 20, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 25 contracts
Tesla has just pulled back $35 in two days, giving us a rare entry point in the most bullish stock in the market.
In the meantime, the reasons for Tesla shares to rise have multiplied. (TSLA) has overnight become the lead meme stock in the market and it is now the top trader in options volumes. Suddenly, the December 20 options expiration looks a long way off.
I have always been willing to take the easy money, the gifts, and the low-hanging fruit. I am kind of tall (6’4”) so it’s easy to do.
It is easy to pick the one company that benefits the most from a Trump presidency and that is Tesla.
One of the most regulated companies in the country is now looking at an absence of regulation. For example, that will bring a much earlier introduction of Full Self Driving in the US, or FSD, already used in China. That can be sold in the US for $15,000 a car. It is unlikely that a Harris administration was ever going to approve FSD for the US.
We also have the enormous advantage with this trade in that the options are sporting a sky high 53% implied volatility.
Therefore, I am buying the Tesla (TSLA) December 2024 $270-$275 in-the-money vertical bull call debit spread at $3.90 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 increase your bid by 10 cents with a second order.
Do not pay more than $4.40 or you will be chasing.
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 $3.90, $4.00, $4.10, $4.20, and $4.30. You should get done on some or all of these.
For the first time ever, Tesla is not trading off their monthly vehicle sales, which this year have been flat. Instead, the stock is focusing on the company’s long-term goals, many of which are finally starting to kick off profits.
Those would include Full self-driving software (FSD), the global electric charging network, roll out of the Cybertruck and semis trucks, lithium processing and recycling, solar energy, and industrial scale battery storage, and other moonshots we haven’t heard about. Wireless charging should go mainstream next year.
These were always the basis of my long-term forecast for the shares of $1,000.
Elon Musk recently revealed the Tesla Robotaxi, bringing 50 with him to give rides to party guests in a Warner Brothers simulated city. Musk, who arrived at the stage in one of the robotaxis - called Cybercab - said production will start in 2027. They will cost 20 cents a mile to operate.
The vehicle will eventually be for sale for under $30,000. Optimus robots served drinks, and the entire event was covered by video drones. The Robotaxis use Inductive charging where they just park over pad and it get wirelessly recharged. Elon certainly can put on a show, the stock less so.
Elon Musk really checkmated the rest of the EV industry with his massive price cuts and buyer incentives, which is 35% after adding in newly qualifying government subsidies.
With this trade, I am willing to bet that Tesla shares will not fall below $275 by the December 20 option expiration in 27 trading days.
Tesla will remain the top EV maker for the next decade easily.
Here are the specific trades you need to execute this position:
Buy 25 December 2024 (TSLA) $270 calls at………....…$72.00
Sell short 25 December 2024 (TSLA) $275 calls at….….$68.10
Net cost:………………………….……….……..................…….…$3.90
Potential Profit: $5.00 - $3.90 = $1.10
(25 X 100 X $1.10) = $2,750 or 28.21%
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.
