DailyPlay – Opening Trade (TSLA) – May 23, 2022

View TSLA Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 3 Contracts June 17, 2022 $620/$600 Put Verticals @ $6.55 Debit.

Total Risk: This trade has a max risk of $1,965 (3 Contracts x $655 per contract).

Trend Continuation Signal: This is a Bearish trade on a stock that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 2/10

OptionsPlay Score: 127

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Investment Rationale

Our bearish trade idea for today is Tesla Inc. (TSLA) which is driven by concerns around inflationary pressure as well as consumer slowdowns. As a key level of $700 has been broken to the downside, while it also failed to close above this level on Friday, we are taking a bearish stand on TSLA. We will only be paying about 1/3 of the vertical width for this out-of-the-money (OTM) Put Debit Spread and we will be risking about 1% of the stock’s value per contract.