We are a little more than a week from expiration with the hyper-volatile TSLA. We’ve enjoyed a remarkable recovery in this position, which was down substantially early in the trade. Let’s take a nice gain today.
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As consumers tighten their belts during the depression, stocks in discretionary sectors will fall. These discretionary purchases include automobiles. Jim and Scott target the largest used car dealer in the U.S. as sales drop during a severe downturn along with credit losses due to overextended loans.
AAL’s earnings report was as bearish as we expected. AAL will underperform peers in 2022 if investors recognize that the strategy management is pursuing will deliver more value for creditors and employees than shareholders. For now, we have a stock that’s close enough to the lower $17 strike in our put spread to exit today at a nice gain.
Supply chain disruptions and slowing economies continue to be a major problem, which has been exacerbated by the war in Ukraine and the latest COVID outbreak in China. In particular, car manufacturers depending on key components from semiconductors to essential metals will feel the pressure.. Jim and Dan recommend a put spread on the world’s largest manufacturer of electric vehicles as the company also deals with headwinds of lower discretionary spending and supply chain disruptions that will create problems for their share price.
