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.
(TSLA) – STOP LOSS
SELL the Tesla (TSLA) September 2024 $250-$260 in-the-money vertical bear put debit spread at $8.80 or best
Closing Trade
9-5-2024
expiration date: September 20, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
Tesla has delivered two back-to-back surprise positive announcements, on robotics and full self-driving software in China and Europe. As a result, the shares have rallied 16%. Since risk control is the order of the day this month, I am going to stop out with a small loss, even though we are still well in the money on an expiration basis.
Therefore, I am selling the Tesla (TSLA) September 2024 $250-$260 in-the-money vertical bear put debit spread at $8.80 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 lower your offer by 10 cents with a second order.
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.
Tesla Q2 sales came in better than expected but are still down YOY, delivering 444,000. The Chinese government recently approved Tesla cars for purchase. Tesla has recently been rediscovered as one of the cheapest AI plays out there.
Don’t get me wrong. I still love Tesla for the long term and expect it to reach $1,000 someday. This is just a summer short-term options trade.
Put spreads this far in the money trade all over the map but give this your best shot.
Tesla shares plunged last year because Elon Musk sold an additional $3.6 billion worth of shares in December, bringing his total for the year to a mind-numbing $40 billion, according to SEC filings.
With this trade, I am willing to bet that Tesla shares will not rise above $245 by the September 20 option expiration in 11 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 12 September 2024 (TSLA) $260 puts at………..................…$31.00
Buy to cover short 12 September 2024 (TSLA) $250 puts at…….$22.20
Net Profit:………….…………….……….……...............................………$8.80
Loss: $8.90 - $8.80 = -$0.10
(12 X 100 X -$0.10) = $120.
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.
