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) October 2023 $200-$210 in-the-money vertical bull call debit spread at $9.50 or best
Closing Trade
10-20-2023
expiration date: October 20, 2023
Portfolio weighting: 10%
Number of Contracts = 11 contracts
With this kind of volatility and this close to our upper strike price, it is not worth the risk to run this position into expiration, even with only hours to go. This position was a max profit only on Wednesday, but that is the world we live in today.
We should get some support at the $200-day moving average at $214.18, but I wouldn’t bet the ranch on it.
Tesla is the most volatile stock in the market, and the stock always runs more than you think, both to the upside and the downside.
Therefore, I am selling the Tesla (TSLA) October 2023 $200-$210 in-the-money vertical bull call debit spread at $9.50 or best.
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.
This was a bet that the Tesla (TSLA) would not trade below $210 by the October 20 option expiration day today.
Here are the specific trades you need to close out this position:
Sell 11 October 2023 (TSLA) $200 calls at….................…….…$20.00
Buy to cover short 11 October 2023 (TSLA) $210 calls at….….$10.50
Net Proceeds:………………………….……….…..........................……$9.50
Profit: $9.50 - $9.00 = $0.50
(11 X 100 X $0.50) = $550, or 5.55% today.
2017 Model S
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.