Roku Stock Buzzing on Netflix Acquisition Rumors

There's a lot of positive sentiment surrounding ROKU at the moment

Deputy Editor
Jun 8, 2022 at 9:09 AM
facebook twitter linkedin

Streaming stalwart Roku Inc (NASDAQ:ROKU) was last seen 7.5% higher in electronic trading, after Business Insider reported that the company is in talks to be acquired by streaming giant Netflix (NFLX). Though details concerning the acquisition are scarce, the report did indicate that Roku has "abruptly closed the trading window for all employees," so they can no longer sell their vested stock.

ROKU has suffered a tough 12 months. Coming into today, the stock sported a 72.6% year-over-year deficit, with its descending 40-day moving average guiding it lower since October. Should these premarket gains pain out, that trendline will be tested throughout today's trading.

Despite the stock's dismal technical setup, 14 of the 20 brokerages rate ROKU a "buy" or better, while the consensus 12-month price target is a 69% premium to last night's closing perch. Should some sort of deal eventually happen, don't be surprised if analysts rush to adjust their stance, which could pressure the stock even lower.

There's been a penchant for bullish bets in the options pits of late. ROKU's Schaeffer's put/call open interest ratio (SOIR) sits higher than just 2% of readings from the past year, indicating a severe call-bias amongst short-term options traders. Those options traders are in luck, as Roku stock has exceeded volatility expectations in the past 12 months, per its Schaeffer's Volatility Scorecard (SVS) of 88 out of 100.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners