Archive Category: Max Profit Alert Archive

I’m writing to explain a non-impactful but potentially confusing event — a “stock split” in shares of Tesla Inc. (Nasdaq: TSLA). I say the event is non-impactful because it won’t change the value of the put options we bought in early July, which, so far, have lost much of their value since shares of the stock have risen since our entry. But stock splits can be confusing. And they affect options contracts on the stock as well. So let me explain what’s going on…

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Of our five open positions, two are bullish: call options on solar contractor ReneSola Ltd. (NYSE: SOL) and our energy sector trade, calls on the Alerian MLP ETF (NYSE: AMLP). Three are bearish: put options on the iShares MSCI Spain ETF (NYSE: EWP), puts on the SPDR Technology Sector ETF (NYSE: XLK) and our Tesla Inc. (Nasdaq: TSLA) puts. We have more bearish positions because of the market environment.

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My thinking and view of the market hasn’t changed much since the detailed review of our portfolio I shared last week. That means all we need to do this week is remain patient and see how the market moves our open positions. Of course, I’m always on the hunt for our next new position. The stock market has moved higher over the past week. This uptick came after a sharp move lower the week before. This “seesaw” (aka “mean reversion”) action is quite typical in a bear market. As we say, nothing moves in a straight line. The recent strength in stock prices means our bearish trades aren’t going our way for now.