Trade Alert – (TSLA) May 30, 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) June 2025 $430-$440 in-the-money vertical bear put debit spread at $8.80 or best

 

Opening Trade

5-30-2025

expiration date: June 20, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

Sell in May and go away? Sounds like a good idea to me.

Although the Tesla share price has rocketed by 66% from $218 to $362 in just seven weeks, the company’s serious problems have not gone away. Sales are running about 10% lower than last year’s figures. A European boycott has taken sales down there by 49% YOY. Substantial government subsidies are being tossed into the dustbin of history.

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. The shares may levitate until then, and the sell-off.

Given the company’s still sky-high 62% implied volatility, the highest of any major company, I believe we can enter a low-risk/high-return short position here.

Therefore, I am buying the Tesla (TSLA) June 2025 $430-$440 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, $9.10, $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 $430 by the June 20 option expiration in 15 trading days.

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

Buy 12 June 2025 (TSLA) $440 puts at………….…$92.00

Sell short 12 June 2025 (TSLA) $430 puts at…….$83.20

Net cost:……………………….……….………………………$8.80

Potential Profit: $10.00 – $8.80 = $1.20

(12 X 100 X $1.20) = $1,440 or 13.64% in 15 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.