ROKU options are reasonably priced right now
Earlier this month, streaming name Roku Inc (NASDAQ:ROKU) locked in eight-consecutive losses before an upbeat earnings report saved the equity, helping it jump to $337.24 on May 7, though the security has since pulled back once again. However, investors shouldn't be too concerned yet, as this dip has Roku stock trading near a bullish trendline, per data from Schaeffer's Senior Quantitative Analyst Rocky White.
Specifically, ROKU has come within one standard deviation of its 200-day moving average following a lengthy stretch above the trendline, defined for this study as having traded north of the moving average 60% of the time in the past two months and in eight of the last 10 trading days. The equity has seen two similar pullbacks within the past three years, and one of those instances resulted in an average 21-day gain of 18.2%.
From its current perch at $308.43, a move higher of similar magnitude would put ROKU at $364.56. In simpler terms, this would give the equity the boost it needs to reclaim its 2021 breakeven and add to its 133.6% year-over-year lead.
Now that earnings are in the rearview, a volatility crush means the stock's near-term options are attractively priced at the moment. Roku stock's Schaeffer's Volatility Index (SVI) stands at 56%, in the low 7th percentile of its annual range, indicating that now is a good time to jump aboard the streaming name's next move with options. What's more, Roku stock has tended to exceed these volatility expectations during the past 12 months. This is based on its Schaeffer's Volatility Scorecard (SVS) of 96 (out of 100).