Buying ROKU put contracts.
ROKU is a poster child for the high valuation / low earnings tech plays that are falling out of favor with investors. The stock currently has a forward PE above 140 which means investors are paying $140 for every dollar of expected earnings.
That leaves the stock vulnerable to disappointment, especially in this market environment that is transitioning out of speculative stocks.
The February $250 put contracts are in the sweet spot for our in-the-money option approach. If ROKU continues lower as expected, we should get close to a 1-for-1 price movement for the price of our put contracts. And if rebounds from this level, the time premium and volatility for these contracts should help to mute potential risk.
- Buy (to open) 2 ROKU February 18th $250 Puts
- Limit $44.00 or less
- The new position will represent roughly 8.2% of our Spec Model capital
~~~~~~~ - 11:27 Executed
- Bot 2 ROKU Feb 18th $250 Puts @ $39.94