Recently, Total Alpha Trading program made a huge win with options on Tesla stock. I wanted to show you the Jeff Bishop strategy on TSLA options and how it worked.
I know that some of these options alerts services can be relatively expensive. However, Jeff bishop’s Bullseye Trades service is EXTREMELY AFFORDABLE and offers similar alerts to the one discussed in this article.
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OK, so the entire market has become overextended now… however if I had to pick the one stock that keeps defying gravity to a point that just utterly disrespects reality as we know it?
It has to be Tesla (TSLA). And I’m not the only one that has noticed…
The electric automaker’s stock surged from $340 per share to $540 in just over a month, and TSLA has been overbought, according to the 14-day Relative Strength Index (RSI) for that whole time.
Meanwhile, with a potential sell-the-news reaction coming after the U.S. and China signed their phase one trade deal, my mentor Jeff Bishop was looking for ways to profit if the market started to show some cracks
SIDE NOTE – FREE EBOOK WITH JEFF’S OPTION TRADING STRATEGY
If you don’t know much about Jeff, be sure to check out the FREE OPTIONS TRADING EBOOK that he offers to anyone that wants to learn his options trading strategy!
Jeff Bishop is a multi-millionaire veteran trader that helps other traders learn to duplicate his options trading results!
I have followed Jeff Bishop’s option trading for a while now and I am extremely impressed. He has a long history of entrepreneurship, investing and trading.
Details of the TSLA Short
Naturally, the terminally overbought shares of TSLA pinged Jeff Bishop’s options trading radar.
One thing that you should know is that Jeff is an options genius, so he didn’t just short Tesla stock directly, or even buy a put option.
On Tuesday, Jeff sold the TSLA $515 call and bought the $520 call for a net premium of $2.90.
The shares ranged from a high of $547.41 to a low of $524.90 on the day, so this was a deep in-the-money call spread.
To put it simply, Jeff was looking for the stock price to break down below the $515 strike before the options expired on January 24, or he risked taking the maximum loss on the trade.
Cracks started to show in the $TSLA chart as soon as Wednesday, as the stock slid lower even while the broader market eked out a win. However, the shares closed the mid-week session at $518.50, still holding above Jeff’s sold call strike.
Here is the daily chart, below.
That changed fast on Thursday, after Morgan Stanley downgraded TSLA stock to “underweight” on… wait for it… valuation concerns. (No kidding, guys.).
Tesla opened the session way below $500 per share, and only traded as high as $514.46 on the day.
Meanwhile, Jeff Bishop and his Total Alpha traders closed out the TSLA bear call spread for a quick profit of $7,000.
Not bad for a two-day trade!
You Can Short TSLA Like a Boss, Too
CNBC reported that Tesla was the most-shorted U.S. stock as of Wednesday, edging out Apple. TSLA shares worth $14.5 billion had been borrowed for shorting purposes, per S3 Partners — a massive bet on the stock to decline:
And while those shorts had the direction right on TSLA stock, given Thursday’s big downgrade-related slide — their strategy kind of sucks, to be honest.
First, shorting a stock is expensive… and I’m not just talking about tying up your capital in margin. If the trade moves against you, losses can add up fast — in fact, they’re theoretically unlimited.
Second, short selling means that your returns are strictly capped by the stock’s percentage moves. If you’d managed to short TSLA squarely at this week’s Tuesday high, and then cover exactly at the low on Thursday… you’d be up all of 10%.
But I’m guessing the majority of that $14.5B short position didn’t accumulate during Tuesday’s trading, and most of those TSLA shorts still need to root for quite a bit more downside before they hit pay dirt.
No wonder Jeff Bishop played a bear call spread instead — limited risk, high-probability returns, and just two days to profit.
And if you want to bend this market to your will (just like Jeff Bishop does), then get ready to go to school! Check out this Options Masterclass to learn some of Jeff Bishop’s option trading secrets!
Even if you think you know how to trade options, Jeff has something to teach you!
Whatever your comfort level is with options right now, you’ll end up smarter, more profitable and ready to hunt down your own winning options trades.
Ben’s Done Biding His Time on LK
There are plenty of options experts out there. Options trading is fantastic due to the flexibility of the strategies you can use. Many people love them because of the huge leverage that you can use.
Profits of 100% or even 500% are not unusual!
Another guy who knows his way around options?
It was just last month that Ben bagged a money-doubling call trade on Luckin Coffee (LK), a.k.a. “the Starbucks of China.”
Since then, he’s kept the ticker on his IPO Payday watchlist, patiently waiting for another opportunity to trade this hot, new-to-Wall Street stock.
On Thursday, he finally gave his famous GREEN LIGHT:
For this quick-turnaround trade, Ben and his IPO Payday players targeted the LK $48 calls expiring next Friday, January 24 and note that he’s keeping a tight stop on this more aggressive trade.
Ben’s strategy is off to a running start in 2020! Just earlier this week, he made a net profit of about 7% on some BILL shares he picked up after the New Year. I will be following along on his latest LK play!
Kyle Dennis Dollar Ace Options Alerts
Kyle Dennis has had a great time recently trading options in his premium alerts service called Dollar Ace.
Dollar ace subscribers have been able to follow along with him and make BANK!
As has Jason Bond with his Weekly Windfalls options trading program. Basically, everyone is making bank!
Jeff Bishop Strategy: Conclusions
Stock options are an amazing way to grow your money fast – if you know what you are doing! Following people like Jeff Bishop, Kyle Dennis or Jason Bond as they make their options trades is a great way to NOT lose money!
I highly recommend that you learn the Jeff Bishop strategy and see if it is a good fit for your trading style.
Have you had any great options or stock trades recently – let us know in the comments below!