Stocks quoted in this article:
Option Brief: Despite unveiling a new 3-D smartphone and comedy pilot this week, Amazon.com, Inc. (NASDAQ:AMZN) is on pace to notch a second consecutive weekly loss. Against this backdrop, put volume is trading at nearly three times the intraday average this morning. Short-term contracts are in high demand, per the stock's 30-day at-the-money implied volatility, which has jumped 7.7% to 27.9%.
Receiving notable attention is AMZN's June 325 put, which is apparently being bought to open for a volume-weighted average price (VWAP) of $2.35. With AMZN down 1.5% at $322.00, these puts have not only moved into the money, but have surpassed their at-expiration breakeven mark of $322.65 (strike less VWAP). Gains will accrue with each step below here (on a move down to zero) Amazon.com, Inc. (NASDAQ:AMZN) settles at tonight's close, when front-month options expire. Conversely, losses are limited to 100% of the premium paid, should the stock stage an eleventh-hour rebound, and finish north of the strike at session's end.