NEW UCPTD Trade Alert - ROKU - Covered Call

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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
Tuesday, December 3, 2019
Covered Call Trade opened using a Standard Covered Call Strategy
NEW Covered Call position with Roku, Inc. (ROKU) this week
Brief Description of WHY I did this trade and my expectations for it
Bought the shares at the same time I did the Cash Secured Put so the CCW description is the same ... I do think it goes higher during this 24 day period. ROKU was hammered yesterday being down some -23% on a Morgan Stanley downgrade ... then this morning the stock is +5% on a positive comment from another brokerage ... man this thing can swing. My take is simple, I think we can assume this whole streaming business is here to stay … and with Netflix being worth some $130 Billion (Q3 $16 Billion Revs) , ROKU with its $16 Billion market Cap (Q3 $750 Million Revs) does seem a possible value play. I decided to use this opportunity to Sell a Cash Secured Put with the thinking the stock moves higher in this 24 day period ... never being assigned the shares, keeping this $5.60 premium ... hoping this is another win!
Trade Breakdown with the 'Krums Calc'
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
Roku, Inc.	ROKU	100	$143.25	$14,325.00
STRIKE	OPTION	OPTION GAIN	STOCK GAIN	TOTAL KRUM
$150.00	$6.00	$600.00	$675.00	$1,275.00
DIVIDEND		CASH ON CASH KRUM %		ANNUAL GAIN
$0.00	$0.00	8.90%
No, they do not offer investors a dividend.
Current Stock Price	Implied Volatility	Imp Vol (+)	Imp Vol (-)	DELTA
$143.25	62.30%	$187.87	$98.63	0.325
		$187.87
$143.25			With Implied Volatility being 0.3115% to reach $187.872375 in this 24 day period, with this Covered Call Strike I'm hoping the stock moves just 0.264379581151833% of that 0.623% Implied Volatility
		$98.63
Important Trade Details
Trade details - 1 contract(s), Strike Price $150 , Premium of $6, with a Dec-27th expiration date receiving a total credit of $600 per share
I Purchased 100 shares for $143.25 on Dec-3rd , $14325 , total investment.
The will be a 24 day trade
This Out the Money (OTM) Covered Call trade has a potential Cash On Cash Return of :
CC - If shares are taken away $12.75 per share, or 8.9 %- Annualized 135.36%
CC - If my shares are not taken away $6 per share, or 4.19 %- Annualized 63.7%
Dividend during this 30 day period? No EX-Dividend date is - N/A- N/A, $0
Earnings Report during this 24 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?
Yes they are	No Earnings	Yes, but small	Yes they do	Yes > 100
Bought the shares at the same time I did the Cash Secured Put so the CCW description is the same ... I do think it goes higher during this 24 day period. For me this trade meets most of my Golden Rules and because I like the stock and have no worries being assigned the shares if it goes Up or Down. I won't lie, this trade is a bit more aggressive for me but I feel at the point of making this trade, it will be successful
This Cash Secured Put trade has 3 typical outcomes
CC - Outcome #1 - the stock moves above my strike price of $150 at expiration, I have my shares taken away and I make MAX gain for this trade 8.9% Cash on Cash investment for this 24 day trade
CC - Outcome #2 - the stock does not move above my strike price of $150 at expiration, I do not have my shares taken away and I make only the option premium of $6 per share for this 24 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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