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.
While the coronavirus madness continues, factories close, and people stay at home, investors are struggling to find a way to save their money.
So far, it is obvious that some industries are resisting this crisis as the demand for their products are soaring. You do not have to be any kind of an expert to find out that this situation will lead to a tremendous increase in time spent in front of the TV, which means more viewing hours but potentially also more consumers. Having this in mind makes it obvious why streaming industry companies are considered as "defensive" investment right now. But this doesn't mean that the industry is without its weaknesses.
One of the companies which are interesting to keep track of the following days is Roku (NASDAQ:ROKU) who will try to take advantage of the situation. But there are still difficulties that will limit Roku's ability to use these conditions straight away.
Weakness – Ad-Based Business Model
It's no secret that companies start spending less money on advertising during hard times, and this is no exception. Unlike Netflix (NASDAQ:NFLX) which has resited ads for year. Roku is in a far more unfavorable position during this unprecedented health crisis. Twitter (NYSE:TWTR) announced it is expecting a drop in revenue and an operating loss despite increased usage, and it is likely that Roku won't be exempt from this decreased advertising spend as its advertising customers are facing great difficulties.
Threats – Volatility
Investors panicked because Roku is going against the big players such as Apple (NASDAQ:AAPL), Disney (NYSE:DIS), Netflix, Amazon.com Inc (NASDAQ:AMZN) and all other streaming players. So whenever news regarding the competitor arises, Roku shares tend to be volatile.
Strength- Business Model
But Roku's business model is such that more streaming platforms could equal more usage for Roku. Roku doesn't favor any streaming service over others, and this helps it to avoid a virtuous cycle when competitors keep offering new options. This network effect in action is one of the strongest competitive advantages of Roku's business model.
As the saying goes, Roku controls the shovels, not the gold.
Opportunity – Commission
The potential increase in streaming demand could have a doubly positive effect on Roku, as users could be ordering more movies and trying out new paid channels. This will result in increased commission revenues, as Roku gets a 20% commission from the content ordered on its website. This could help in offsetting the loss from advertising.
This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com
The post Is Roku Above Other Streamers – A SWOT Approach appeared first on IAM Newswire.
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.
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