Today's last LT trade comes courtesy of ROKU, a high-flying stock providing streaming
services. Today's 8% dive is due to new competition from Comcast and FB. Thus its
dominance is in question somewhat. The stock in my view was overvalued at $160. It
has fallen to $135+ as I write. My thesis is that fund managers will be looking to lighten
up their positions in ROKU for the rest of the week.
LT3: Sold (10) ROKU 140/141 call spreads for +.31 (+3.10). Margin used = .69 (6.90)
at 10:59am whenROKU = $136.
Thesis: < 140
If the stock breeches $140 anytime during today through Friday, immediately sell the
140/139 put spread. The combined premium will provide ammunition for turning a
profit as one side will be pushed out to OTM territory for expiration.