Roku Options Traders Active During Slide

ROKU options traders have been active in the past two weeks

Managing Editor
Apr 8, 2019 at 12:26 PM
facebook twitter linkedin


Roku Inc (NASDAQ:ROKU) stock is down 6.2% to trade at $59.81 today, after Citigroup downgraded the streaming name to "sell" from "neutral" on competition concerns. The stock is fresh off its second weekly loss of 2019, and has now racked up four downgrades in the past month. Despite the recent struggles, ROKU call options have been flying off the shelves lately. 

In fact, the equity showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest total weekly options volume during the past 10 days, with names highlighted in yellow new to the list. Per the chart below, 113,771 ROKU calls were exchanged over this two-week time frame, as opposed to 92,449 puts.

MAO April 8

Today however, the options activity is more balanced. Roughly 33,000 calls have crossed the tape, the same for puts -- with total options volume double the average intraday amount. Most active are the weekly 4/12 50- and 60-strike puts, but there's also new positions being opened at the weekly 4/12 60-strike call.

Whether it's calls or puts, Roku sports relatively inexpensive short-term option premiums right now. The stock's Schaeffer's Volatility Index (SVI) of 56% is higher than just 12% of all other readings from the past year, suggesting ROKU's near-term options are pricing in relatively low volatility expectations at the moment.

Meanwhile, Roku stock's recent pullback could have bullish implications, if history is any guide. Specifically, ROKU closed Friday's session within one standard deviation of its 40-day moving average. There have been four other times the security has pulled back to support at this moving average after a lengthy stretch above it, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, and one month later, Roku was up an average 8.3%.

 

Daily Stock Chart ROKU

Winning With Weekly Options

1606854690

  


 
Special Offers from Schaeffer's Trading Partners