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) - TAKE PROFITS
SELL the Tesla (TSLA) December 2024 $390-$400 in-the-money vertical bear put debit spread at $9.10 or best
Closing Trade
11-12-2024
expiration date: December 20, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 13 contracts
Tesla has just pulled back $35 in two days, and I am already at half my maximum profit point in just two days.
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.
Euphoria only lasts so long.
We have the enormous advantage with this trade in that the options are sporting a sky-high 59.6% implied volatility.
Therefore, I am selling the Tesla (TSLA) December 2024 $390-$400 in-the-money vertical bear put debit spread at $9.10 or best.
As a result, you get to take home $1,170 or 10.98% in two trading days. Well done, and on to the next trade.
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 $9.00, $8.90, $8.80, and $8.70 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 was willing to bet that Tesla shares would not trade above $390 by the December 20 option expiration in 20 trading days.
Tesla will remain the top EV maker for the next decade easily.
Here are the specific trades you need to exit this position:
Sell 13 December 2024 (TSLA) $400 puts at…………………......…$78.00
Buy to cover short 13 December 2024 (TSLA) $390 puts at…….$68.90
Net Proceeds:………...………….……….………..………….…...............…$9.10
Profit: $9.10 - $8.20 = $0.90
(13 X 100 X $0.90) = $1,170 or 10.98% in two trading days.
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.
