“The power of spreads is you don’t need the stock to make a big move for a chance at a substantial return.”
Last week, I wrote about Elon Musk positioning himself as the most powerful non-elected person in American politics.
Why this matters for trading is simple…
We’re in a perception-based market right now. I mean, just look at trillion-dollar tech companies like MSFT, NVDA, GOOG and APPL.
Now, I believe Musk’s electric vehicle company Tesla (TSLA) is setting itself up for similar dominace.
In fact, TSLA is becoming a proxy for huge tech advancements like artificial intelligence and energy transformation. The crazy thing is… I don’t think investors can fully grasp the magnitude of its autonomous driving tech, at least not yet.
Add in Musk’s new perception as a political fixture and you have potential for major moves in companies like TSLA.
That’s why I got positioned on TSLA in The War Room using a unique strategy.
The TSLA Spread Trade
The trade I used on TSLA is known as a “spread trade.”
You see… instead of buying Tesla shares and paying full price, I set up an options strategy that gave us exposure for a fraction of the price.
The powerful component of spreads is you don’t need the stock to double or triple to make substantial returns.
In fact, even a moderate move in one direction could deliver outsized profits.
The Result
Since I got into the spread trade, Tesla is up $125. On a percentage basis we are matching the mover with 90% less risk.
This is the power of using Wall Street perception to your advantage.
And when you combine it with a powerful trading strategy like spread trades, then you have a chance at substantial returns.
A few War Room members were also in on this trade. Here’s what some of them had to say.
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