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/trade. Think of it like this, I'm 'Showing you the World thru my Eyes'.
NEW TRADE ALERT
Tuesday, January 21, 2020
Covered Call Trade opened using a Standard Covered Call Strategy
NEW Covered Call position with ROKU Inc. (ROKU) this week
If my shares are taken at expiration, this is the CCW KRUM!
TRADE KRUM! (see details below)		DAYS	Cash on Cash %	Annualized
$1,765.00		32	12.89%	147.06%
Brief Description of WHY I did this trade and my expectations for it
ROKU is moving higher today because of news (Roku Stock Rises After Company Announces Its Entry Into Brazil) and I've seen this before .. so to take advantage of this nice move higher, I wrote the OTM $145 CC and collected $9.55 ... I think this moves higher and will drift lower again allowing me to PLAY THE GAME ... while I hold the stock that basically hasn't moved much since I bought it at $143.. my new Cost Basis now like $121 on this stock with all the CCW and buy backs ... love just playing the momentum and collecting the prem's along the way
Trade Breakdown with the 'Krums Calc'
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
ROKU Inc.	ROKU	100	$136.90	$13,690.00
EXPIRATION DATE	DAYS	STRIKE	OPTION	CoC % GAIN
Feb-21st	32	$145.00	$9.55	12.89%
DIVIDEND		OPTION GAIN	STOCK GAIN	TOTAL KRUM
$0.00	$0.00	$955.00	$810.00	$1,765.00
No, they do not offer investors a dividend.
Current Stock Price	Implied Volatility	Imp Vol (+)	Imp Vol (-)	DELTA
$136.90	80.10%	$191.73	$82.07	0.45
		$191.73
$136.90			With Implied Volatility being 0.4005% to reach $191.72845 in this 32 day period, with this Covered Call Strike I'm hoping the stock moves just 0.341332724616508% of that 0.801% Implied Volatility
		$82.07
What is Implied Volatility? - Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy. - source: Zacks Investment Research
Important Trade Details
Trade details - 1 contract(s), Strike Price $145 , Premium of $9.55, with a Feb-21th expiration date receiving a total credit of $955. per share
Already had 100 shares for $136.9 , $13690 , total investment.
The will be a 32 day trade
This Out the Money (OTM) Covered Call trade has a potential Cash On Cash Return of :
CC - If shares are taken away $17.65 per share, or 12.89 %- Annualized 151.8%
CC - If my shares are not taken away $9.55 per share, or 6.98 %- Annualized 82.14%
Dividend during this 32 day period? No EX-Dividend date is Feb-13th, $0
Earnings Report during this 32 day period? Yes Earnings Report is (~) date of Feb-13th
Did this trade meet the Golden Rules?
SP500 type	Earnings?	Dividend	Volume?	Open Interest?
Big enough for me	Yes Earnings	No they do not	Yes they do	Yes > 100
ROKU is moving higher today as the DOW is down some -167 ... its because the company said its now in India which could move earnings/profits higher ... well, I've seen this play out before and I'm using this opportunity to sell a very nice Covered Call into this rally in the shares ... Cash On Cash % gain if shares are taken? 12+% ... 32 day trade, should be fun
This Covered Call trade has 2 typical outcomes
CC - Outcome #1 - the stock moves above my strike price of $145 at expiration, I have my shares taken away and I make MAX gain for this trade 12.89% Cash on Cash investment for this 32 day trade
CC - Outcome #2 - the stock does not move above my strike price of $145 at expiration, I do not have my shares taken away and I make only the option premium of $9.55 per share for this 32 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	Yes
			$0.00	Feb-13th
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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