In quantitative trading, the hardest part isn’t finding a good entry—it’s knowing when to ring the register. Today, April 15, 2026, we closed our Poor Man’s Covered Call (PMCC) on ROKU. While the long-term consensus is bullish, our technical data and the impending earnings “IV Crush” dictated a disciplined exit.

The Execution: Final Numbers

We exited the trade with a clean execution on both legs:

• Sold to Close (Long Leg): 2x Mar 19 ’27 $70 Calls @ $47.28 ($9,456.00 total)
• Bought to Close (Short Leg): 2x May 15 ’26 $110 Calls @ $7.88 ($1,576.00 total)
• Net Exit Credit: $39.40 per contract

Performance Results:

• Net Profit (This Leg): $1,172.00 in just 7 days.
• Cumulative ROKU Campaign: This brings our total realized profit to $2,073.00 over a 64-day cycle.
• Annualized Return: A massive 63.23%, significantly outperforming the broader market.

The Quantitative Thinking Process: Delta as the Payday

A common misconception of the PMCC is that it is primarily a “Theta harvesting” play. While we sell short calls to collect “rent” and offset the cost of the LEAP, this specific ROKU win was driven almost entirely by Delta capture.

In a properly structured PMCC, the short call acts as a subsidy, but the LEAP is the engine. Because we maintained a high-intrinsic setup (103.83%), our net delta was heavily positive. When ROKU ripped from $101 to $108.80, the long leg gained significantly more value than the short leg lost. We didn’t win because time passed; we won because we were right on the direction and gave the trade enough “headroom” to breathe.

Why Exit Now?

While ROKU remains a favorite for 2026, we chose to harvest profits today for three specific reasons:

1. Technical Exhaustion (The “Redline”) At the time of closing, ROKU was pushing right into the $110.00 resistance where our short calls were capped.

• Fast Stochastic: 93.71 (Overbought extreme).
• RSI: 68.71 (Approaching the 70 “Sell” zone). The probability of a multi-day breather was significantly higher than a continued vertical run.

2. The Earnings Gamble (April 30) With earnings two weeks away, we face a major IV Crush Risk. Current IV Rank is 57.6%. Immediately after the report, we expect volatility to deflate. Because this strategy is net-long Vega, staying in would mean watching our LEAP premiums shrink even if the stock stays flat. We chose to sell our volatility while it was expensive.

3. Analyst Context vs. Strategy Wall Street recently boosted price targets (Baird to $120, Citizens to $160). While these justify a long-term hold, they also create “friction” near $110. By exiting now, we front-run the inevitable profit-taking that occurs as the stock tests these major psychological levels.

Strategic Conclusion

Our “Thinking Process” manual is clear: Don’t let a winning trade turn into a loser by being greedy.

We successfully captured a massive move in a single week. By closing today, we “de-risk” before the earnings volatility and keep our powder dry. We will monitor the RSI and look to re-deploy capital into a new ROKU diagonal once the technicals cool back down into the 40–50 range.

Campaign Status: CLOSED – PROFITABLE