Trade Alert – (TSLA) July 24, 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) August 2025 $370-$380 in-the-money vertical bear put debit spread at $9.00 or best

 

Opening Trade

7-24-2025

expiration date: August 15, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

Q2 earnings were out after the close yesterday, and they couldn’t have been worse. On September 30, the company lost most of its green credit it sells to other car companies, the source of $2.7 billion in revenues over the last decade, thanks to the new Tax Bill.

Tesla posted the worst quarterly sales decline in more than a decade and profit that missed Wall Street targets, but its profit margin on making cars was better than many feared. Tesla shares were down 2.6% in after-hours trading. Almost every metric posted large YOY declines. Revenue fell to $22.5 billion for the April-June quarter from $25.50 billion a year earlier. Analysts on average were expecting revenue of $22.74 billion, according to data compiled by LSEG. Adjusted profit per share of 40 cents lagged the consensus of 43 cents per share.

With all markets now extremely overextended, 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 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.

Teslas were probably the most boycotted big-ticket items as a result.

Given the company’s still sky-high 60.5% implied volatility, the highest of any major company, I believe we can enter a low-risk/high-return short position here with only a 14-day view.

Therefore, I am buying the Tesla (TSLA) August 2025 $370-$380 in-the-money vertical bear put debit spread at $9.00 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Don’t pay more than $9.40, 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  $9.00, $9.10, $9.20, $9.30, and 9.40. 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 $370 by the August 15 option expiration in 17 trading days.

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

Buy 12 August 2025 (TSLA) $380 puts at………….…$68.00

Sell short 12 August 2025 (TSLA) $370 puts at…….$59.00

Net Cost:……………………….……….…………………………$9.00

Potential Profit: $10.00 – $9.00 = $1.00

(12 X 100 X $1.00) = $1,200 or 11.11% in 17 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.