Trade Alert - (TSLA) July 1, 2025

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) July 2025 $360-$370 in-the-money vertical bear put debit spread at $8.80 or best

Opening Trade

7-1-2025

expiration date: July 18, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

I now have a 90% cash position, which I absolutely hate having. Nobody pays you to manage cash.

The war of words between the president and Elon Musk reignited today, with the latter telling Musk to go back to South Africa. He also ordered of review of all Tesla subsidies, which are immense and have kept the company in business.

This has sent implied volatilities rocketing back to a sky-high of 64%, and Tesla shares have not moved for months. The realized volatility has been zero.

With all markets now extremely overextended, there is very little out there for new trades. The smart money is now frenetically writing out-of-the-money calls against their biggest technology positions.

The European sales figures are out this morning, and they are nothing less than disastrous. Brand destruction is running amok. In Sweden, they fell by 64.4% YOY, and 61.6% in Denmark. Competition from (YD has become a killer.

Elon Musk has returned to his firm after a one-year foray into politics that ended very badly for him badly and unhappily discovered that the world has changed. For a start, there are fewer Tesla buyers. Many of his senior staff have quit the firm to cash in their options. Competition from Baidu and Xiaomi in China is fierce.

On June 22, Tesla launched its long-awaited robotaxi business in Austin, Texas (I’ve been waiting ten years). Only 12 vehicles made it onto the road, and there were fortunately no crashes.

The total US market for autonomous taxis is estimated at only $70 billion a year. Alphabet has a two-year head start with its Waymo service, with 1,500 self-driving Jaguar EVs on the road in San Francisco, and it is authorized to start operating in another ten cities. The robotaxi will never become a major profit source for Tesla, or anyone else, for that matter. Tesla shares rallied 10% on the event, which they immediately gave back.

Tesla’s first half sales will be out on Tuesday, July 1, and I think they will be awful as the quarter coincides with the US trade war. Teslas were probably the most boycotted big-ticket item as a result.

Given the company’s still sky-high 60.5% implied volatility, the highest of any major company, I believe we can enter a low-risk/high-return short position here with only a 14-day view.

With this trade, we also get a bonus from the extra day of time decay from the July 4 national holiday.

Therefore, I am buying the Tesla (TSLA) July 2025 $360-$370 in-the-money vertical bear put debit spread at $8.80 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Don’t pay more than $9.30 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 don’t want to sit in front of a computer screen all day or 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 $8.80, $8.90, $9.00, $9.20, and $9.30. You should get done on some or all of these.

With this trade, I am willing to bet that Tesla shares will not rise above $360 by the July 18 option expiration in 13 trading days.

Here are the specific trades you need to execute this position:

Buy 12 July 2025 (TSLA) $370 puts at…………..…$71.00

Sell short 12 July 2025 (TSLA) $360 puts at…….$62.20

Net cost:……………………….……….…………………..…$8.80

Potential Profit: $10.00 – $8.80 = $1.20

(12 X 100 X $1.20) = $1,440 or 13.64% in 13 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.

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