ROKU Sees Surge in Attractively Priced Options

Calls have been popular in the last 10 days

Assistant Editor
May 11, 2020 at 3:02 PM
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The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days, with data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Stocks highlighted in yellow are new to the list. One newbie that sticks out in particular is Roku Inc (NASDAQ:ROKU). Below, we'll take a closer look at the options activity surrounding the streaming company, and see how its been performing on the charts amid global economic strain.

options may 11

At last check, the stock is up 3.2% to trade at $130.71. Rising on the charts since an annual low of $58.20 on March 17, ROKU has gained support from its 20-day moving average -- which caught a 5.9% pullback on May 1. Up 42.4% in the last month, the equity is a chip-shot away from its year-to-date breakeven point. 

Short interest has started falling off, down 21.7% in the last two reporting periods. However, the 11.73 million shares sold short accounts for 14.3% of the stock's available float, indicating bears still have some control of ROKU. 

Looking at White's data, over the past 10 days, 285,439  weekly calls and 196,547  weekly puts have crossed the tape. This afternoon though, the May 135 call with a standard expiration date is the most popular, followed closely by the 130 call from the same series -- with new positions being opened at both. 

In addition to the surge in options volume, ROKU is seeing attractively priced premiums. The stock's Schaeffer's Volatility index of 65% sits in the 18th percentile of its annual range, implying that near-term options traders are pricing in relatively low volatility expectations. Plus, it's Schaeffer's Volatility Scorecard (SVS) sits at up at 98 (out of 100), showing that the stock has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers. 

 

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