Trade Alert - (TSLA) October 24, 2024 - 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.
TAKE PROFITS
SELL the Tesla (TSLA) November 2024 $165-$175 in-the-money vertical bull call debit spread at $9.85 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
10-24-2024
expiration date: November 15, 2024
Portfolio weighting: 10% weighting
Number of Contracts = 12 contracts
With this trade, an astonishing 20 out of the last 21 trades have been profitable.
Tesla share prices opened up a monster $34, or 16.20% this morning so I am going to take profits.
Tesla Earnings Shock to the Upside, with both third-quarter profits and margins topping estimates. Elon Musk said that he expects 20% to 30% vehicle growth next year, sending the company's shares up 12% in post-market trading.
The company still sees 2025 production of cheaper model, maybe the Model 2. The Cybertruck has reached profitability for the first time and is reaching mass production. Tesla will see “slight growth” in deliveries this year.
I am using the spike in the share price to take profits on my long to avoid election risk. Musk is up to his eyeballs as a Trump supporter and a Harris win could tank the stock. In any case, there re only a few cents left in the position and hanging on to the November 15 option expiration in 17 trading days with 87.50% of the maximum potential profit in hand is not worth the risk.
We also had the enormous advantage with this trade in that the options were sporting a sky high 61% implied volatility.
Therefore, I am selling the Tesla (TSLA) November 2024 $165-$175 in-the-money vertical bull call debit spread at $9.85 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 10 cents with a second order.
For the first time ever, Tesla is not trading off their monthly vehicle sales, which this year have been flat. Instead, the stock is focusing on the company’s long-term goals, many of which are finally starting to kick off profits.
Those would include Full self-driving software (FSD), the global electric charging network, roll out of the Cybertruck and semis trucks, lithium processing and recycling, solar energy, and industrial scale battery storage, and other moonshots we haven’t heard about. Wireless charging should go mainstream next year.
These were always the basis of my long-term forecast for the shares of $1,000.
Elon Musk really checkmated the rest of the EV industry with his massive price cuts and buyer incentives, which is 35% after adding in newly qualifying government subsidies.
With this trade I was willing to bet that Tesla shares would not fall below $175 by the November 15 option expiration in 16 trading days.
Tesla will remain the top EV maker for the next decade easily.
Here are the specific trades you need to execute this position:
Sell 12 November 2024 (TSLA) $165 calls at…………..……..….....$80.00
Buy to cover short 12 November 2024 (TSLA) $175 calls at…….$70.15
Net Proceeds:………………………….……………..…………..............…$9.85
Profit: $10.00 - $8.85 = $1.05
(12 X 100 X $1.05) = $1,260 or 11.86%
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.