DailyPlay – Closing Trade (TSLA) – Opening Trade (TSLA) – June 7, 2022

Closing Trade

• TSLA: 61.07% Loss: Sell to Close 3 Contracts June 17, 2022 $620/$600 Put Verticals @ $2.55 Credit. DailyPlay Performance: By closing 3 Contracts we will be receiving $765.

View new TSLA Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 2 Contract June 24, 2022 $695/$675 Put @ $7.57 Credit.

Total Risk: This trade has a max risk of $2,486 (2 Contract x $1,243 per contract).

Counter Trend Signal: This is a Bullish strategy on a stock that is experiencing a bearish trend.

1M/6M Trends: Bearish/Bearish

Technical Score: 2/10

OptionsPlay Score: 89

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

Here’s a pure technical trader’s play on Tesla (TSLA), simply using the cloud model’s Conversion and Base Lines as reference points, along with the Market Profile indicator (to see where the volume has traded in its recent bottoming process).

Price rallied from its 2022 low up to its Base Line (in orange) and then fell to its Conversion Line (in pink). I think that it can hold support around the $695/$675 level, as that lower number is also where little volume has traded. Therefore, we will look to sell a June 24th $695/$675 put spread for $9.675 (based upon yesterday’s closing mid-prices). That represents about 39% of the spread differential, and gives us downside protection in case the stock gets hit more than I currently expect it will.

TSLA – Daily