When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - Roku, Inc. (ROKU) - BUY
BUY Roku, Inc. (ROKU) August 2021 $355 - $360 in-the-money vertical BULL call spread at $4.30
Opening Trade
8-5-2021
expiration date: August 20, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a short-term bet that Roku, Inc. (ROKU) will stay above $360 in the next 15 days.
We are at a point where many analysts are raising their S&P end of year targets because of the margin expansion occurring in the market.
Tech is involved in this as well and I do believe the positive earnings are more or less priced into the Nasdaq index.
However, I do believe that buybacks will be the x-factor as we cruise into year-end and one of the largest risks out there appears to be the delta variant risk.
If a flight to safety does happen, shelter-at-home stocks will see a major in-flow, therefore I am using Roku’s lukewarm earnings’ sell-off as an entry point into an in-the-money call spread with August expiration.
Any major jolt up would be reason for taking profits.
If you don’t do options, buy the stock, my end of year target is $470.
Here are the specific trades you need to execute this position:
Buy 23 August 2021 (ROKU) $355 calls at……….….………$52.30
Sell short 23 August 2021 (ROKU) $360 calls at………….$48.00
Net Cost:……………………..…….…....................……..…….....$4.30
Potential Profit: $5 - $4.30 = $.70
(23 X 100 X $.70) = $1,610 or 16.27% in 15 days
If you are uncertain on how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.