Options Traders Target Roku Stock After Job Cuts

Options Traders are targeting ROKU in response

Deputy Editor
Sep 6, 2023 at 2:42 PM
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Options traders are targeting Roku Inc (NASDAQ:ROKU) today, after the company is reduced its workforce by 10%. The streaming name also upped its sales forecast due to restructuring in relation to the job reductions. To follow, Piper Sandler lifted its price target to $90 from $70, while Evercore ISI raised its own to $80 from $75. 

So far, 151,000 calls and 116,000 puts have crossed the tape, volume that's 4.2 times the average daily amount. The weekly 9/8 95-strike call is the most popular, followed by the weekly 9/8 89-strike put, with new positions being bought to open at both. It's also worth noting that ROKU has plenty of call open interest expiring at the monthly September expiration date. 

Options bulls have been winning out in the options pits for a while now. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ROKU's 50-day call/put volume ratio of 1.83 ranks in the 95th percentile of its annual range. 

Options are also well-priced at the moment. The stock's Schaeffer's Volatility Index (SVI) of 49% stands higher than just 5% of readings in its annual range, implying that options players are pricing in low volatility expectations.  

On the charts, Roku stock is up 2.4% at $85.70 at last glance, though earlier the stock surged as high as $95.84. The stock's 50-day trendline has acted as close support since the start of June, and it found support at several long-term moving averages in July, including the 80-day trendline. Year-to-date, the equity is up 110.3%. 

 
 

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