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 2024 $390-$400 in-the-money vertical bear put debit spread at $8.20 or best
Opening Trade
11-8-2024
expiration date: December 20, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 13 contracts
33% in three days is enough for me. With these strike prices, I am betting that (TSLA) falls short of a new all-time high in 29 trading days. While the long-term outlook for Tesla is great, actual profits from Elon Musk’s new position in life won’t materialize for a couple of years. Traders are happy to chase the stock this high, but not THAT high.
Euphoria only lasts so long.
We have an enormous advantage with this trade in that the options are sporting a sky-high 59.6% implied volatility.
I can also use this short position to hedge the (TSLA) double long I already have in place, which are already deep in-the-money.
Today, Tesla Topped $1 Trillion in Market Cap at $316 a share, riding on the coattails of the Trump win, probably the biggest election payoff in history. Since the election, the shares have risen by a spectacular $80, or 33%, increasing the value of Elon Musk’s holdings by an incredible $65 billion.
It is the most money made by an individual in the shortest amount of time history, and Musk will likely get all of this tax free.
Therefore, I am buying the Tesla (TSLA) December 2024 $390-$400 in-the-money vertical bear put debit spread at $8.20 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Don’t pay more than $9.20 or you will be chasing.
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.
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 $8.30, $8.40, $8.50, $8.60 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 gets wirelessly recharged. Elon certainly can put on a show, the stock is 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 $240 by the December 20 option expiration in 29 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 13 December 2024 (TSLA) $400 puts at……….…...$82.00
Sell short 13 December 2024 (TSLA) $390 puts at…….$73.80
Net cost:………………………….……….……….................……$8.20
Potential Profit: $10.00 - $8.20 = $1.80
(13 X 100 X $1.80) = $2,340 or 21.95%
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.
