I am a happily married man and a father of four beautiful kids…
… which is why I don’t understand my wife’s resistance to legally adopt ROKU.
She thinks I’ve lost my mind.
“No you can’t adopt a publicly-traded company, that’s not even a thing,” she says.
Last month my 4-year old son somehow got on Amazon and ordered $5,000 worth of Jenga sets… which showed up at our house!
Yep, that’s my son sitting on $5k worth of Jenga sets.
So why can’t I adopt a stock that wins me $5k in trading profits instead?
It’s basically paying for our other kids!
But seriously, I love this stock.
And most people don’t understand why it’s so good to trade. However, you are about to receive a crash course on how to trade one of 2019s most volatile and most exciting stocks of the year—ROKU is up 380% this year but I can show you how to do even better than that with options.
Unless you have been living under a rock you know about the dark horse of streaming devices ROKU.
They aren’t as elite as Apple TV.
Nor is it as simple to work as the Amazon Fire Stick.
Competition for these devices created for your Netflix and chill privilege is steep and cutting edge.
Few know that Roku is a Netflix baby (but they filed for legal separation and are 100% adoptable).
In 2007 Netflix decided to create its own streaming device. But it realized it might alienate itself on the other devices.
Netflix came to this revelation during production. CEO Reed Hastings decided to take this idea and run in a new direction.
The spin-off led to the birth of the Roku company. In the beginning, you basically got a Netflix streaming device without HD.
But now that Rokus are now of the most popular streaming boxes. Rivaling others for how easy they are to use and the dizzying amount of steamable channels it offers. Even offering such an array of models you can waste away a whole day trying to pick one out.
Besides being a popular device Roku doesn’t charge a subscription for the use of its products and its devices carry a cheaper price tag.
Which raises the question of how the heck does Roku make money?
First, let’s go with the obvious. The cheapest device is the Roku streaming stick. It sells for $30 and costs less than $10 to manufacture. The profit margin increases as the price of the device climbs.
They also profit from common unfortunate events.
How many times has your dog or cat got ahold of your remote and rendered it useless? Or your wife gathered up the throw blanket in the living room and tossed the remote in with the wash?
These remotes are cheap for Roku to make and set you back $10 or more for every remote death. That replacement remote is pure profit.
Also, you aren’t crazy, the Roku devices aren’t made to last.
Due to the lack of an internal fand, they need replacing after a few years. Chances are by the time you need a new one there already is an improved model out… that you will need to buy.
Roku also earns a large portion of their income from platform revenue. This is basically the fees charged for content and advertising as well as licensing for things like smart TVs toting Roku services. The Roku channels also work their magic by pushing subscriptions, selling content, and selling ads.
Roku has always been a favorite of mine and I’m talking stock not what I binge reruns of Friends on.
Why I love trading ROKU
What makes ROKU different for me than any other stock? Why do I come back to it time and time again?
Three main reasons.
First, its psychological. Trading is about mental discipline.
Using a stock that’s made me money in the past boosts my confidence pure and simple
This makes me more likely to stick to my strategies, adhere to my stops and targets, and correctly size the trades.
But there’s also a component of familiarity that I get with certain stocks.
Trading stocks combines quantitative and qualitative analysis. Much of that qualitative analysis comes down to decision making.
Familiarizing myself with ROKU lets me pick out patterns and changes I’d otherwise miss. It’s little nuances that stick out.
Think of it like living with someone for a while. You eventually begin to pick up on their little quirks. It gets easier to tell their moods without them saying anything.
Second, it creates clear, identifiable trends and patterns.
ROKU daily chart
Check out how you can easily see the trend changes and patterns. These aren’t hard to spot on the daily chart.
Best of all, these movements show up all the time at lower time frames.
Third, the stock undergoes large swings when it moves. That gives me high returns for the directional trades that work out.
I highlighted the perfect setup for Weekly Money Multiplier members heading into ROKU’s earnings.
Here’s exactly what I saw:
ROKU hourly chart
This had everything I wanted on an hourly setup.
- Easy to spot uptrend
- Clear triangle pattern
- Squeeze in price over time
The trade worked out perfectly.
I locked in profits for $7,000, up 250%!
ROKU isn’t alone. I find tons of trades like these, especially with momentum stocks.
I even wrote a free article on why I love these stocks that you can check out here.
I’m not saying my wife will let me adopt ROKU. Chances are I will lose this battle.
But, that doesn’t mean I won’t stop looking for other orphan stocks to bring home each week.
If you want to hop in on the action, then join Weekly Money Multiplier.