Trade Alert - (TSLA) April 30, 2025 - TAKE PROFITS - SELL
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) May 2025 $320-$330 in-the-money vertical bear put debit spread at $9.50 or best
Closing Trade
4-30-2025
expiration date: May 16, 2025
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
I am going to use the $22 selloff in Tesla this morning to derisk today and cut my highest risk, most volatile position. The next big market-moving event is the April Nonfarm Payroll Report on Friday, May 2, which could go either way. This morning GDP report shows that we are solidly in recession and there are at least another one or two more bad quarters ahead of us.
We are right at huge upside resistance from the 200-day moving average at $291.66, and a break there could rapidly add another 10%.
Therefore, I am selling the Tesla (TSLA) May 2025 $320-$330 in-the-money vertical bear put debit spread at $9.50 or best.
As a result, you get to take home $840 or 7.96 % in 4 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 5 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 $9.50, $9.40, $9.30, and $9.20. You should get done on some or all of these.
With this trade, I was willing to bet that Tesla shares would not rise above $320 by the May 16 option expiration in 12 trading days.
Here are the specific trades you need to close out this position:
Sell 12 May 2025 (TSLA) $330 puts at…….................….…$57.00
Buy to cover short 12 May 2025 (TSLA) $320 puts at…….$47.50
Net Proceeds:……………………….……….……......................…$9.50
Profit: $9.50 - $8.80 = $0.70
(12 X 100 X $0.70) = $840 or 7.96 % in 4 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.
