Trade Alert - (TSLA) March 7, 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

Sell the Tesla (TSLA) March 2025 $350-$360 in-the-money vertical bear put debit spread at $9.94 or best

 

Closing Trade

3-7-2025

expiration date: March 21, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

 

I think it’s safe to call this trade a win. Tesla shares are now trading a full $100 below the next strike price for this position. Picket lines at showrooms and arson attacks against dealerships and charging stations are never a good sign for business.

With 94% of the maximum potential profit in hand, the risk reward of continuing with this position is no longer favorable.

As a result, you get to take home $1,128 or 10.44% in 12 trading days. Well done, and on to the next trade!

Tesla is toast.

With a European boycott of its products because of Elon Musk’s political choices, there is no way that the company will reach its 2 million car target. 1.7 million or less, less than last year, is more likely. Picket lines are not taking place at the California showrooms and factory.

Given the company’s extraordinary 75% implied volatility, the highest of any major company, I believe we can enter a low risk/high return short position here. This is against a backdrop of Tesla sales that may be flat or down this year. Hoopla can only go so far.

Therefore, I am selling the Tesla (TSLA) March 2025 $350-$360 in-the-money vertical bear put debit spread at $9.94 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 2 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  $9.94, $9.92, $9.90, $9.88, and $9.86. You should get done on some or all of these.

This was a bet that Tesla shares will not rise above $350 by the March 21 option expiration in 17 trading days.

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

Sell 12 March 2025 (TSLA) $360 puts at………................…$103.00

Buy to cover short 12 March 2025 (TSLA) $350 puts at…….$93.06

Net Proceeds:………………………….……….…………..................…$9.94

Profit: $9.94 - $9.00 = $0.94

(12 X 100 X $0.94) = $1,128 or 10.44% in 7 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.