Trade Alert – (TSLA) June 6, 2025 – BUY

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 $180-$190 in-the-money vertical bull call debit spread at $8.50 or best

 

Opening Trade

6-6-2025

expiration date: July 18, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 13 contracts

Yesterday, we saw one of the most chaotic trading in Tesla shares in market history. On the week, the shares dropped by an incredible $85, or 23.2%. More importantly, the implied volatility for the options soared from 59% to 85%, with some closing as high as 105%.

What happened was that long-term bulls on the stock were writing out-of-the-money calls against their positions to soften the blow, mitigate the risk, and lower their average cost. Cascading market orders drove implied volatilities to unbelievable levels.

Implieds are still at 65% now, so there is some real meat here to take a longer-term position. A 65% implied on top of a 42% decline for the New Year, $485 top for a vertical bull call spread, another $100 in-the-money is free money in the bank.

On June 12, Tesla launches 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.

Therefore, I am buying the Tesla (TSLA) July 2025 $190-$200 in-the-money vertical bull call debit spread at $8.50 or best.

Tesla shares would have to drop to a new low for the year, or a massive $110, or 37% from here in 29 trading days, for us to lose money on this trade.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Don’t pay more than $9.00 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  $8.50, $8.60, $8.70, $8.80, $8.90, and $9.00. You should get done on some or all of these.

With this trade, I am willing to bet that Tesla shares will not fall below $190 by the July 18 option expiration in 29 trading days.

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

Buy 13 July 2025 (TSLA) $180 calls at……….……$123.00

Sell short 13 July 2025 (TSLA) $190 calls at…….$114.50

Net Cost:……………………….……….………………………$8.50

Potential Profit: $10.00 – $8.50 = $1.50

(13 X 100 X $1.50) = $1,950 or 17.65% in 29 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.