Streaming video platform Roku (ROKU) announced earnings Thursday after the closing bell, reporting a smaller-than-expected loss and better-than-expected revenue. More importantly, management gave a bullish revenue forecast for the current quarter and full year.
Shares spiked immediately following the report but are now pulling back. Let’s take advantage of the post-earnings volatility.
Below is a recommendation for a silly put, which is a put that is more than 10% out of the money. Note that I plan to ladder this put if possible.
I am also recommending a silly put spread. However, I am not advising that you double up on the positions. If you choose to trade the bull put spread and are new to this kind of trade, you may want to review the SFPC Coaching Session: Advanced Tactics.
Current Stock Price: $134.63
Action: Sell to open the Roku Feb Week Four (2/28) 115 Put for around $1.20. You can go as low as $0.90, but please don’t start there and always use limit orders.
Silly Put Spread
Action: Sell toopen the ROKU Feb Week Four (2/28) 115 Put for around $1.20 and buy to open the ROKU Feb Week Four (2/28) 110 Put for around $0.80. Set initial credit limit at $0.40.