Trade Alert – (TSLA) June 20, 2025 – EXPIRATION AT MAX PROFIT

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) – EXPIRATION AT MAX PROFIT

EXPIRATION of the Tesla (TSLA) June 2025 $190-$200 in-the-money vertical bull call debit spread at $10.00

 

Closing Trade

6-20-2025

expiration date: June 20, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 13 contracts

Just to be clear, this position does not expire until 4:15 PM on Friday, June 20.

Like all successful trades, this one looks stupidly cautious with 20:20 hindsight and (TSLA) trading at $319.82. That puts it at a gob-smacking 50.91% above the nearest $200 strike price. Going maximum aggressive when the market is going to hell in a handbasket is usually a winning strategy.

As a result, you get to take home $2,600 or 25.00% in 11 trading days

You don’t have to do anything with this expiration.

Your broker will automatically use your long position to cover your short position, canceling out the total holdings.

The entire profit will be credited to your account on Monday morning, June 23, and the margin freed up.

Some firms charge you a modest $10 or $15 fee for performing this service.

The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock-solid balance sheets.

When I added this position, there was a panic going on in Tesla shares, down an incredible $85.

Tesla has been a big money maker on the short side for us this year since it peaked at $485. However, a rare short-term opportunity on the long side suddenly presented itself.

A very public spat between Elon Musk and the president has caused Tesla shares to collapse an amazing $90 or 24.6% on the week. It wasn’t helping that Tesla is probably the worst-affected American auto company by the Chinese rare earths embargo, as their cars are all-electric, and sales are in free fall.

Tesla launched its long-awaited robotaxi business in Austin, Texas. The total US market for 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. The shares may levitate until then, and the sell-off.

Tesla shares would have to have dropped to a new low for the year, or a massive $165, or 45% from the recent $365 top, for us to lose money on this trade.

With this trade, I was willing to bet that Tesla shares would not fall below $200 by the June 20 option expiration in 11 trading days.

Here is the specific accounting you need to close out this position:

EXPIRATION of 13 June 2025 (TSLA) $190 calls at…………..…$129.83

EXPIRATION of short 13 June 2025 (TSLA) $200 calls at…….$119.83

Net Proceeds:………………….…………….……….……………………..…$10.00

Profit: $10.00 – $8.00 = $2.00

(13 X 100 X $2.00) = $2,600 or 25.00% in 11 trading days