As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (TSLA)- SELL-STOP LOSS
Sell the Tesla (TSLA) November, 2015 $200-$220 in-the-money vertical bull call spread at $14.80 or best
?RISK OFF?
Closing Trade: NOT FOR NEW SUBSCRIBERS
10-7-2015
expiration date: November 20, 2015
Portfolio weighting: 10%
Number of Contracts = 6 contracts
The day after the Trade Alert went out to buy Tesla, two brokers issued minor downgrades on the stock. In Morgan Stanley?s case it was a mere haircut of their target from $465 to $450.
But a downgrade is a downgrade.
I call this getting ?snakebit.?
We have just broken the 200-day moving average. Time to get out so we can get back in at a lower price.
It?s only because we have such a long November 20 expiration that our loss on this is so small, despite the 7.7% decline in the stock.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Bull Call Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/
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.
Here are the specific trades you need to execute this position:
Sell 6 November, 2015 (TSLA) $200 calls at????.?.$35.00
Buy to cover short 6 November, 2015 (TSLA) $220 calls at?.$20.20
Net Cost:??????????????????.?.....$14.80
Loss: $15.80 - $14.80 = -$1.00
(6 X 100 X -$1.00) = -$600 or -0.60% profit for the notional $100,000 portfolio.
