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| DISCLAIMER: This trade is based on this date. I'm not suggesting a move up or down. I'm showing my trade that I have already done. I'm not recommending this stock as a purchase. Think of it like this, I'm showing you the world thru my eyes. | ||||
| NEW TRADE ALERT |  | |||
| Friday, December 27, 2019 | ||||
| Covered Call Trade opened using a Standard Covered Call Strategy | ||||
 | ||||
| NEW Covered Call position with Roku Inc. (ROKU) this week | ||||
| TRADE KRUM! (see details below) | DAYS | Cash on Cash % | Annualized | |
| $1,058.00 | 27 | 7.50% | 101.39% | |
| Brief Description of WHY I did this trade and my expectations for it | ||||
| Ill be honest on this trade ... I think the market are OVERBOUGHT and with ROKU trading a bit today but near my stock purchase price... Im gonna use this ATM CCW to pick up some Prem but thinking if the markets selloff this acts more as down side protection of $10+ ... with my last CCW picking up +5 I feel the combined returns is +15 pts ... we'll see | ||||
| Trade Breakdown with the 'Krums Calc' | ||||
| COMPANY | SYMBOL | SHARES | PRICE | TOTAL COST |
| Roku Inc. | ROKU | 100 | $141.07 | $14,107.00 |
| STRIKE | OPTION | OPTION GAIN | STOCK GAIN | TOTAL KRUM |
| $141.00 | $10.65 | $1,065.00 | -$7.00 | $1,058.00 |
| DIVIDEND | CASH ON CASH KRUM % | ANNUALIZED GAIN | ||
| $0.00 | $0.00 | 7.50% | 101.39% | |
| No, they do not offer investors a dividend. | ||||
| Current Stock Price | Implied Volatility | Imp Vol (+) | Imp Vol (-) | DELTA |
| $141.07 | 66.34% | $187.86 | $94.28 | 0.55 |
| $187.86 | ||||
| $141.07 |  | With Implied Volatility being 0.3317% to reach $187.862919 in this 27 day period, with this Covered CallStrike Im hoping the stock moves just 0.332196207556532% of that 0.6634% Implied Volatility | ||
| $94.28 | ||||
| Important Trade Details | ||||
| Trade details - 1 contract(s), Strike Price $141 , Premium of $10.65, with a Jan-24th expiration date receiving a total credit of $1065 per share | ||||
| Already had 100 shares for $141.07 , $14107 , total investment. | ||||
| The will be a 27 day trade | ||||
| This At the Money (ATM) Covered Call trade has a potential Cash On Cash Return of : | ||||
| CC - If my shares are not taken away $10.65 per share, or 7.55 %- Annualized 102.06% | ||||
| CC - If my shares are not taken away $10.65 per share, or 7.55 %- Annualized 102.06% | ||||
| Dividend during this 29 day period? No EX-Dividend date is - N/A- N/A, $0 | ||||
| Earnings Report during this 27 day period? No Earnings Report is (~) date of - N/A- N/A | ||||
| Did this trade meet the Golden Rules? | ||||
| SP500 type | Earnings? | Dividend | Volume? | Open Interest? |
 |  |  | | |
| Big enough for me | No Earnings | No they do not | Yes they do | No > 100 |
| read above ... nothing more to add here :) ROKU is a high flyer that could rocket or tank ... playing it for the Prem's and tight 30 day trades. Wish me luck :/ | ||||
| This Cash Secured Put trade has 3 typical outcomes | ||||
| CC - Outcome #1 - the stock moves above my strike price of $141 at expiration, I have my shares taken away and I make MAX gain for this trade 7.5% Cash on Cash investment for this 27 day trade | ||||
| CC - Outcome #2 - the stock does not move above my strike price of $141 at expiration, I do not have my shares taken away and I make only the option premium of $10.65 per share for this 27 day trade. I keep my shares. | ||||
| Further research with - Using charts for technical analysis, Dividend information and Earnings Report Date | ||||
| RSI, SUPPORT LINES | KELTNAR, OBV | DIVIDEND | EARNINGS REPORT | |
| View Chart-ROKU | View Chart-ROKU | Verify-ROKU | Verify-ROKU | |
 |  | No |
No
| |
| $0.00 | ||||
| Always look at a companies chart ... it tells a story and that story could be UP or DOWN | ||||
 | ||||
| How I could 'Manage' this trade should the stock rise or fall prior to expiration | ||||
| I could manage this Covered Call - #1 - The stock moves and closes on expiration above my strike price. My shares will be given assigned to the Call Buyer, I will be given cash for my shares (strike price) | ||||
| I could manage this Covered Call - #2 - The stock does not close at or above my strike by expiration, I will likely not have my shares taken from me. I keep my shares, I keep the Covered Call premium. Trade ends. Shares become available to trade. | ||||
| I could manage this Covered Call - #3 - Regardless of where the stock moves during the Covered Call timeframe, a news event or Ex-Date prompts the Call buyer or market maker to take my shares before expiration. Most common situation, the stock has moved up and now trades near or above the strike price making it profitable to exercise the Call option early for the Call Buyer to collect the dividend. | ||||
| Education Corner | ||||
| Great Covered Call video posted at | ||||
| Covered Call - Description - A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other securities. ... writing (i.e. selling) a call generates income in the form of the premium paid by the option buyer. Source - https://en.wikipedia.org/wiki/Covered_call | ||||
| Disclaimer - Yes - at the time of this posting I do have a position in this equity. By posting this I am by no means recommending this equity and am not front running for its performance. I have risked my own money and am accountable for the trade results. | ||||
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