Trade Alert – (TSLA) July 18, 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) July 2025 $420-$430 in-the-money vertical bear put debit spread at $10.00

 

Closing Trade

7-18-2025

expiration date: July 18, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

Just to be clear, this position does not expire until 4:15 PM on Friday, July 18.

Like all successful trades, this one looks stupidly cautious with 20:20 hindsight and (TSLA) trading at $310.78. That puts it at a welcome $109.22 or 26% below the nearest $420 strike price.

As a result, you get to take home $1,200 or 11.11% in 14 trading days. Well done, and on to the next trade.

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, July 21, 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.

All we needed was for Elon Musk to open his mouth and have another tussle with the president. That knocked 10% of the stock in a day, making this trade a sure thing. All that was left was to run out the clock until expiration.

With all markets now extremely overextended and the Volatility Index at a lowly $15 handle, there is very little out there for new trades. The smart money is now frenetically writing out-of-the-money calls against their biggest technology positions.

Elon Musk has returned to his firm after a one-year foray into politics that ended very badly for him badly and unhappily discovered that the world has changed. For a start, there are fewer Tesla buyers. Many of his senior staff have quit the firm to cash in their options. Competition from Baidu and Xiaomi in China is fierce.

On June 22, Tesla launched its long-awaited robotaxi business in Austin, Texas (I’ve been waiting ten years). Only 12 vehicles made it onto the road, and there were fortunately no crashes.

The total US market for autonomous 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, or anyone else, for that matter. Tesla shares rallied 10% on the event, which they immediately gave back.

Tesla’s first half sales were down an awful 13% YOY. Tesla’s was probably the most boycotted big-ticket item as a result of the trade war.

With this trade, we also got a bonus from the extra day of time decay from the July 4 national holiday.

With this trade, I am willing to bet that Tesla shares will not rise above $420 by the July 18 option expiration in 14 trading days.

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

EXPIRATION of 12 July 2025 (TSLA) $430 puts at……….…….$119.22

EXPIRATION of short 12 July 2025 (TSLA) $420 puts at…….$109.22

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

Profit: $10.00 – $9.00 = $1.00

(12 X 100 X $1.00) = $1,200 or 11.11% in 14 trading days