Tesla Debit Spread Drives 424% Profit for Options Bulls

Subscribers to Schaeffer's Vertical Options Trader nabbed an outstanding 424% return with our Tesla Inc (NASDAQ:TSLA) front-month, out-of-the-money vertical debit spread. Below, we'll dig into the factors that drove our bullish stance on the EV giant, as well as how the options trade unfolded.

At the time of our entered recommendation on August 15, founder and CEO Bernie Schaeffer laid out the following TSLA spread: Buying the September 370 call and simultaneously selling the September 400 call. The security had recently cleared a trendline of December highs to a consolidation area, and was bouncing off support at $300. 

On Sept. 11, the stock gapped higher by 6% amid upbeat Model Y demand. The shares built on that with a 7.4% pop on Friday, thanks to a lofty bull note from TD Cowen. The following Monday; news that CEO Elon Musk repurchased shares for the first time since 2021 sent the stock to its highest level since late January.

We closed half of our position on Friday, Sept. 12, with a partial profit of 225%. We closed the other half on Monday, Feb. 12, allowing our subscribers to lock in a net profit of 424% in one month.