Roku Inc (NASDAQ:ROKU) stock is on the rise, up 2.3% at $111.59 at last check, after a rare double upgrade from Morgan Stanley to "overweight" from "underweight," to go with a price-target hike to $135 from $85. The firm cited multiple tailwinds, including faster revenue growth, and expects a strong year ahead for the advertising industry.
On the charts, Roku stock has been rallying since the start of the month, and could soon overtake its Oct. 31 three-year high of $116.66. During this rally, short interest has been on the rise, up 28.6% in just the last two weeks, and now accounts for 5.8% of the stock's available float.
Year to date, the equity is up 50.1%. Keep an eye on ROKU's 14-day relative strength index (RSI) of 79.9 though, sitting firmly in "overbought" territory, which typically precedes a short-term pullback.
Call traders are chiming in after the bull note, with 2,912 calls exchanged so far -- triple the amount typically seen at this point. The December 115 call is the most popular. These options are attractively priced at the moment, too, per ROKU's Schaeffer's Volatility Index (SVI) of 42%, which sits in the low 2nd percentile of its annual range.
Now looks like an excellent time to weigh in on the stock's next moves with options, as its Schaeffer's Volatility Index (SVI) of 42% sits higher than just 2% of readings from the last year. In other words, options are affordably priced at the moment. And with a Schaeffer's Volatility Scorecard (SVS) of 12 out of 100, the security has consistently realized lower volatility than its options have priced in, so a premium-selling strategy could be the move for options traders.
