We’re going back to Roku (ROKU), a stock we have traded successfully 18 times in a row in this service since we began trading it in late 2019. That includes seven winning trades on the stock so far in 2023.
ROKU is down more than 6% today as investors look to offload riskier names. Let’s take advantage of the elevated volatility and, thus, premium by selling a put that is more than 11% out of the money. This provides us with a nice cushion in case the stock continues to sell off.
Please do not chase the trade by accepting less premium than the “go as low as” price recommended below. Work your limit order but exercise patience and let the trade come to you.
Current Stock Price: $61.05
Action: Sell to open ROKU 21 Jul 54 Put
Recommended Limit: Set your initial limit order at $0.55. You can go as low as $0.51, but please don’t start there and always use limit orders.
Target Exit Price: $0.27
Expiration: After the close on Friday, July 21
Potential Rate of Return: 1% in 15 days if this option expires worthless