$ROKU bulls stream fast profits

Bullish option traders have scored fast profits in Roku (ROKU) calls bought this morning.

Just this morning, Market Rebellion’s Unusual Options Activity service found that 5,000 Weekly $350 calls expiring this Friday, Apr. 9, were purchased for $2.60  to $6.50 above open interest of 2,472 contracts with shares at $333.34.

Those calls traded up to $16.25 this afternoon, more than 3 times their average purchase price. The stock rose 8.83% at the same time, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

ROKU ended up 9.47% to $359.37 today. The streaming app was initiated with an Outperform and $400 price target at Evercore ISI yesterday.