Affordable Software Stock Ripe for Bullish Attention

Software stock’s JFrog Ltd (NASDAQ:FROG) 27% post-earnings pop on Nov. 7 has acted as support amid its recent pullback. The shares are also now trading at their 100-day moving average, a trendline with quantified results that have recently worked in their favor.
 
In the options pits, put support can be found between the 55 and 60 strikes, while front-month peak call open interest (OI) at the 60-strike dissipated at the close today. The higher strikes could become magnets, especially if there is a break above $62.50, where there’s a runway toward a buildup of 75-strike calls.  

 

 
Short interest has more than doubled over the past month and is sitting near one-year range highs, where we’ve seen buys work out over the subsequent months.
 
Options are affordable, per the stock’s Schaeffer’s Volatility Index (SVI) reading of 66%, which ranks in the 29th annual percentile. Plus, this is a name you’d rather own with rising implied volatilities (IV) than a low IV, as that often has indicated chop of a bull trap.
 
Our recommended March call has a leverage ratio of 5.3 and will double on a 22.3% rise in the underlying equity.