Roku options traders can bet big on the ‘Roku recommends’ product


Roku Inc. (NASDAQ: ROKU) is in the preparation phase of a new promotional product called Roku Recommends, according to a report published Tuesday by DigiDay, an online trade magazine.

The new product is a video ad that will be sponsored by a brand and will play on the Roku platform when a customer clicks on a pop-up window on their TV screen, according to the report, which cited three unidentified advertising executives. .

Brands are reportedly being asked to pay in the six-figure range for the ad. The product will launch in the second or third quarter of this year, according to DigiDay.

Options traders can bet that the news report will come true in the first half of the second quarter, as all bullish bets on Tuesday are due on May 21.

Evercore ISI also began hedging the streaming shares on Tuesday with a superior performance rating and a $ 400 price target.

The Roku Trades: At 10:26 am, a trader executed a call sweep of 406 Roku options with a strike price of $ 390 that expires on May 21. The operation represented a bullish bet of $ 666,700 for which the operator paid $ 16.42 per option contract.

At 10:26 a.m., a trader executed a buy sweep of 373 Roku options with a strike price of $ 390 that expired on May 21. The operation represented a bullish bet of $ 631,600 for which the operator paid $ 16.93 per option contract.

At 10:26 a.m., a trader executed a buy sweep of 406 Roku options with a strike price of $ 390 due May 21. The operation represented a bullish bet of $ 623,000 for which the operator paid $ 17.95 per option contract.

At 10:27 a.m., a trader executed a call sweep of 335 Roku options with a strike price of $ 390 that expires on May 21. The operation represented a bullish bet of $ 616,800 for which the operator paid $ 18.41 per option contract.

At 10:28 a.m., a trader executed a buy sweep of 304 Roku options with a strike price of $ 390 that expired on May 21. The operation represented a bullish bet of $ 549,000 for which the operator paid $ 19.26 per option contract.

Together, traders are betting more than $ 3.08 million that Roku’s stock price is going to go up.

Because it is important: When a sweep order occurs, it indicates that the trader wanted to get into a position quickly and is anticipating an imminent big move in the stock price.

A sweeper pays the market price for the call option in lieu of bidding, sweeping the order book of multiple exchanges to fill the order immediately.

These types of call option orders are typically placed by institutions, and retail investors may find it useful to keep an eye out for sweepers because it indicates that “smart money” has entered a position.

ROKU price action: Roku shares rose 9.47% on Tuesday, closing at $ 359.37.

Photo courtesy of Roku.

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