BUY, SELL, HOLD (2)

Roku Stock Red-Hot as Earnings Loom

ROKU options traders have been favoring puts lately

Managing Editor
Apr 29, 2025 at 2:51 PM
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Roku Inc (NASDAQ:ROKU), one of our top stock picks of 2025, is up 2.4% to trade at $69.75 today. The streaming company's first-quarter earnings report is due out after the close on May 1, and options bears have been growing bolder ahead of the event. 

Roku has a history of volatile post-earnings moves. The stock gapped higher by 14.1% after an upbeat report in February, and but shed 17.3% after a dismal report in late October. Overall, the stock averaged a post-earnings move, regardless of direction, of 16.5% after the last eight reports. This time around, the options market is pricing in a larger-than-usual post-earnings swing of 20.4%.

ROKU is in the midst of an eight-day win streak, trimming its year-to-date deficit down to 6.3% after trading as low as $52.53 earlier this month. The rally has the shares testing their 50-day moving average, a trendline that hasn't been cleared on a closing basis since March.

ROKU Stock Chart

Puts have been much more popular than usual in the options pits. ROKU's 10-day put/call volume ratio of 0.53 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 85% of readings from the past year. So while calls still outflank puts on an absolute basis, the high percentile suggests the ratio is on an uptick that nears an annual high rate.

Despite the penchant for outsized moves, purchasing premium may have to wait. This is per ROKU's Schaeffer's Volatility Scorecard (SVS) of 6 out of 100, making it a prime premium-selling candidate.
 

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