Here was the exact scenario:

ROKU was trading at $98.5-99.25 at the time I brought it up. The $98 strike puts, that expire on Friday, we're going for $8/ per contract. I suggested selling the puts for the $8 premium. I was confident that they'd beat earnings, which they did today, thus sending the stock above $98 at the time of expiration, hence the "free money" comment. If the stock didn't beat earnings and was below $98 your effective cost basis would have been $90 per share. Since Roku will be above $98 in 48 hours you would have made a free $800 per contract put you sold. I hope that explains it better.

ETA: After re-reading your post, I shouldn't have used the word "naked". Sometimes wrong words are used when the market is open and you're processing different strategies at the same time. Apologies.

Why would you ever do this? What kind of risk tolerance do you have?!

What if the stock gaps down 5-10%?

Doesn't Robinhood require you to have the cash in your account to cover it if the option is executed? So $9800 in this case?

jamaggie06 said:

---

But selling a put really has nothing to do with owning the shares. You're actually leveraging up when you do that. ie, a move up in the stock price increases your stock holdings while simultaneously decreasing the liability of the puts you sold. Similarly, if the stock drops, you lose more money as you've lost the value lf the stock and the liability of your puts has increased. Thus owning the stock and selling a put is a leveraged long position; not a defensive or short position.

---

Yeah you're right on owning the stock, that's what I get for using bad terminology

RH does. Some other brokerage accounts might not. Likely depends on how volatile the stock is.

badharambe said:

---

Why would you ever do this? What kind of risk tolerance do you have?!

What if the stock gaps down 5-10%?

---

I only sell puts on stock that I don't mind owning (or want to own) medium to long term for your exact case of if the bottom drops out. At least in your scenario my cost base has been lowered some with the premium vs. just buying the stock out right

And also, I'm not throwing OA money at these...I sold a whopping 1 put on the ROKU example that Prog mentioned

Also, I took a new job in my company late last year that is way more time consuming (I guess promotions do that) so I'm not doing much options trading right now as I don't have the time daily to look at charts. I like selling puts since I'm doing more of at least a short/med term hold strategy to help with entry points

badharambe said:

---

Why would you ever do this? What kind of risk tolerance do you have?!

What if the stock gaps down 5-10%?

---

ROKU wasn't going to miss. I went back and re-read the conference call from their prior qtr. They reaffirmed the high end estimates for their next earnings, yesterday's. That was the insurance policy for me that they'd do well. Just like in yesterday's conference call they reaffirmed numbers for the remainder of the year. That's why it's gaping up this morning.

Prognightmare said:

---

badharambe said:

---

Why would you ever do this? What kind of risk tolerance do you have?!

What if the stock gaps down 5-10%?

---

ROKU wasn't going to miss. I went back a re-read to conference call from their prior qtr. They reaffirmed the high end estimates for their next earnings, yesterday's. That was the insurance policy for me that they'd do well. Just like in yesterday's conference call they reaffirmed numbers for the remainder of the year. That's why it's gaping up this morning.

---

nearly 118 right now

Upgrades of the stock are coming in now.

Aggie founder and CEO of ROKU will be on CNBC at 10 am cst.

I thought the exact same thing and I'm pretty sure that he has extended a warm Aggie welcome to him. Hell, I bet he'd be allowed to watch fall practices when Gabe was getting kicked out yesterday.

Hey you mentioned looking at puts on ROKU. An option trader I follow thinks $125 is going to be near the top in the short term and he's going to be looking at puts if it gets close. Take that FWIW.

Thanks!

Aggie_2463 said:

---

Bob Knights Liver said:

---

Aggie_2463 said:

---

gougler08 said:

---

So 401k question...if I do just want to move it all to cash for now, do I just sell the investment (I use Fidelity)?

---

My fidelity 401K we have like 26 funds to choose from, at the end of the day prior to 3 pm I just go in an reallocate my investments to 100% Bond fund (Pretty much like cash)... but you can only move between funds every 30 days minimum. So if you do it today, it be 30 days until you are suppose to be able to re-allocate it to another fund. I did it less than that before and got a warning.

So I have had mine in a bond fund for about 1.5 months already waiting for this correction.

---

I think most 401K rules keep you from selling out of one fund and then getting back into that same fund within 30 days. I think most are fine if you sold your S&P Index fund to go to a bond fund and then got back into a different fund in less than the 30 days. You should check on that.

---

Ah, good to know. Thanks!

---

Following up... hearing lots of people on TV now using bond bubble in their language. I believe I saw $15 trillion in negative yield bonds as of yesterday, and that number was half that a few months ago. Everyone is running to them (or gold).

https://www.channel3000.com/news/money/gold-climbs-to-sixyear-high-bond-yields-collapse/1107002559

It doesn't really feel like bonds are safe either... am I wrong?

Thanks!

Quote:

---

Why Roku thinks Apple and Disney will give the streaming platform a big boost
8:48 am ET August 8, 2019 (MarketWatch)
Share
Print
By Emily Bary

'It would be foolhardy to try to launch a new over-the-top service without Roku,' says analyst

Roku Inc. shares are surging in premarket trading Thursday after the company raised its full-year outlook and talked up the opportunities from new streaming entrants like Walt Disney Co.

"We are excited, to say the least, about the coming services into [over the top], and believe that we are an essential platform for these new services," said Scott Rosenberg, the head of Roku's (ROKU) platform business, on the company's conference call Wednesday evening. He cited the company's evolving suite of ad products as well as backend machine learning applications that predict which streamers are most likely to subscribe to a given service.

Disney (DIS) recently announced plans (http://www.marketwatch.com/story/disney-sets-high-bar-with-new-1299-streaming-bundle-for-disney-espn-and-hulu-2019-08-06) to launch a $12.99 streaming offering that will combine its own forthcoming streaming service along with ESPN+ and ad-supported Hulu. Apple Inc. (AAPL) and AT&T Inc. (T) are among other big players (http://www.marketwatch.com/story/warnermedia-names-dtc-streaming-service-hbo-max-to-launch-in-spring-of-2020-2019-07-09) with new streaming services on the horizon.

Roku's latest numbers (http://www.marketwatch.com/story/roku-stock-gains-after-earnings-outlook-beat-2019-08-07) and commentary drew praise from analysts who see further upside for Roku's red-hot stock. Shares had climbed 230% on the year as of Wednesday's close and were up 18% in premarket trading Thursday.

"Roku second-quarter results showed strength in nearly every metric with accelerated revenue growth and robust profitability coming in ahead of guidance and consensus estimates," Guggenheim's Michael Morris wrote. "Roku is the industry-leading streaming video platform, and we maintain our conviction that the company's growing user base and value proposition for viewers, marketers, content owners, and TV brands will continue to drive economic growth and value creation for shareholders."

Read: 'Disney will win' streaming battle with Netflix, says analyst (http://www.marketwatch.com/story/disney-will-win-streaming-battle-with-netflix-analyst-2019-08-07)

Morris is upbeat about the company's ability to scale its monetization efforts, after average revenue per user growth accelerated to 26.9% "The company also attributed ad growth to expanding first-party customer relationships at scale, which provides precision targeting, premium inventory access, unique sponsorships, and significant reach," he wrote.

He rates the stock a buy with a $119 target price.

William Blair's Ralph Schackart cheered Roku's highest overall revenue growth rate since the company went public, as Roku increased its top line by 59% in the last quarter. "As the traditional-TV ad market transitions in favor of [over the top] and streamed video, we believe Roku is well positioned to take advantage," he wrote. "The share of smart TVs sold with the Roku OS is increasing, too."

Schackart has an outperform rating on the shares. While he doesn't list a formal price target, he sees "upside to $145 through the next 12 to 18 months."

Needham's Laura Martin praised Roku's "A+ execution" and keyed in on the company's commentary around its scale advantage, since it has more than 30 million active accounts on the platform. "By implication, Roku's ad targeting is better so its ROI is higher, so its CPMs (i.e., pricing) can be higher," she wrote.

Martin rates the stock a buy with a $120 target. She adds that "it would be foolhardy to try to launch a new OTT service without Roku."

---

I sold calls against my remaining roku position yesterday. Will get called out tomorrow if the price stays where it is trading pre-open.

Still have bull sentiment in the company. I am just going cash in my Roth.

Oil is up 2.5%, and RIG is red... oof

Potential stupid question: would ROKU be a good candidate for OA's model T approach? Any ideas on where it might settle post-earnings?

There's more qualified people to ask about that on this thread than me.

Short term (1-min bars) would be about 120.7

ROKU CEO Anthony Wood about to come on CNBC.

TEUM makes me sad in pants...

Continues to drop post-ER even with increased guidance

E said:

---

TEUM makes me sad in pants...

Continues to drop post-ER even with increased guidance

---

I wonder if $2.93 is a good entry point for some stock, RIG Is killing me sinking some money into either more COOP or maybe TEUM at this level?

AMD back up to $33. I thought the Google news was already priced in.

E said:

---

TEUM makes me sad in pants...

Continues to drop post-ER even with increased guidance

---

I took all of mine off the table. I don't trust the market right now, taking my money where I can at this point

IrishTxAggie said:

---

Irish's way out there prediction. Assuming no major changes or announcements, we close the gap that was left from Friday-Monday.

---

Assuming Trump's twitter fingers stay off the market, I'm doubling down on this.

That aurelius value has it out for TEUM... just wish I wasn't averaged in at $4.61

E said:

---

That aurelius value has it out for TEUM... just wish I wasn't averaged in at $4.61

---

Can you average down? The way this thing swings, it will probably be back to $4 something by September.

COOP with a bull flag forming