Call Buyers Blitz Record-Setting Roku Stock

Guggenheim thinks Roku can rally another 27%

Guggenheim upgraded Roku Inc (NASDAQ:ROKU) stock to "buy" from "neutral," and boosted its price target to $119 from $75 -- a 27% premium to last night's close, and the second highest on Wall Street. Analyst Michael Morris called Roku's asset value "compelling," and said growth in account and streaming metrics and accelerating third party demand are among the "key catalysts for shares."

In reaction, ROKU stock is up 4.6% to trade at $97.83, earlier topping out at a record high of $98.43. The streaming device shares have been red-hot since bottoming at an annual low of $26.30 on Dec. 24, nearly quadrupling in value. Plus, the equity closed out the month of May up 42.2% -- marking its third monthly gain of at least 40% so far this year.

Amid today's latest surge, a fresh batch of options bulls are blasting the stock. Already today, 41,000 calls have changed hands on Roku -- more than four times what's typically seen at this point, and volume pacing in the 100th annual percentile. The weekly 6/7 98- and 100-strike calls are most active, and speculators buying to open these options are betting on more upside for ROKU through expiration at the close this Friday, June 7.

Now's an attractive time to be purchasing premium on short-term ROKU options. The security's Schaeffer's Volatility Index (SVI) of 55% ranks in the 12th annual percentile, indicating near-term contracts are pricing in relatively low volatility expectations at the moment.