ROKU 21MAY PUT BUTTERFLY (2051)

[IgorKeymaster]

ROKU at 337

Here’s the 195min chart:

ROKU has earnings in 3 days and this is a big risk for this trade. I am taking a slightly bearish position here ahead of the earnings. I’m buying 340/320 put spread and I am selling 320/305 put spread to offset cost of the long put spread. This makes it an unbalanced put butterfly with 18 days until expiration. If ROKU rallies after earnings, this trade will lose 50%+ of it’s value. I am going to assume full risk on this trade and size the trade accordingly.

Trade Setup:
BTO $ROKU 21MAY 340/320/305 PUT BUTTERFLY MID 4.40 DEBIT
RISK: $440
REWARD: $1550
POP:52%

RISK PROFILE:

[IgorKeymaster]

ROKU at 305.85

Chart:

I’m going to make an adjustment, removing most (if not all) risk out of this trade.

I’m going to spread the short 320 puts and convert this trade from a broken wing put butterfly into a put condor.

Here’s the video covering this adjustment:

Trade:

TOS order: BUY 1 +2/-1/-1 CUSTOM ROKU 100 21 May 21/21 May 21/21 May 21 320/310/335 Put/Put/Put @4.45 LMT

[IgorKeymaster]

ROKU at 308.32

I’m going to exit this trade with 10 days to go. We should be able to lock in 40% here.

Order Ticket:

BUY 1 -1/-1/+1/+1 CUSTOM ROKU 100 21 May 21/21 May 21/21 May 21/21 May 21 340/305/310/335 Put/Put/Put/Put @1.80 LMT

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