27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Amazon.com, Inc. (NASDAQ:AMZN)’s reintroduction of Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL) video streaming devices prompted a sharp selloff in Roku Inc (NASDAQ:ROKU) Thursday (though the stock moved up 13 percent Friday).
Some bullish experts were undeterred by the news.
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There Are Better Channels
Needham analyst Laura Martin suggested Amazon is not necessarily a critical channel for the product category. By her estimates, consumers are more inclined to shop for video streamers at brick-and-mortar retailers rather than online.
“My gut feeling is that a lot of these devices are sold at Best Buy Co Inc (NYSE:BBY),” Martin told Benzinga in a phone interview Friday.
Roku Is More Than A Device
Roku’s revenue isn't entirely dependent on the device and is partly composed of streaming services, which are seen to be similarly unaffected by Amazon’s product sales.
Martin posited that 800,000 of Roku’s 1.6 million subs sold last quarter were attributed not to Roku hardware but to TVs sold with the platform built in.
The Timing Is A Bit Late
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Additionally, the timing isn’t necessarily to Apple or Google’s advantage. The pair likely intended to leverage holiday interest and online shopping surges to boost their biggest quarter, but Martin intimated that they may have taken too long to make their move.
“They’ve got 10 days before Christmas, so good for them that they got this done before Christmas, but it’s 10 days,” she said.
They Don’t Compete, Anyway
At the same time, Martin doesn’t consider Apple TV and Chromecast to directly compete with Roku.
“Apple TV is a really different target market,” she said, comparing its $100-plus price against Roku’s $23 to $49. “There’s really no overlap with Roku purchasers.”
Taylor Cox contributed reporting.
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Image Credit: Mattnad - Own work, CC BY-SA 3.0, via Wikimedia Commons
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.