Stocks quoted in this article:
Bullish betting has accelerated on Amazon.com, Inc. (NASDAQ:AMZN) today, as approximately 20,000 calls have been exchanged thus far -- a 46% mark-up over the equity's expected intraday call volume. At the other end of the options spectrum, around 12,000 puts have crossed the tape.
Leading the pack is the weekly 9/13 310-strike call, which has seen nearly 2,800 contracts change hands -- the majority of them at the ask price, pointing to buyer-fueled activity. More specifically, these out-of-the-money calls traded at a volume-weighted average price (VWAP) of $0.61. Meanwhile, implied volatility has climbed 1.8 percentage points, and today's volume exceeds current open interest levels, signaling the initiation of new positions.
In order for traders to secure a profit from their bought-to-open calls, AMZN must rise north of breakeven at $310.61 (strike price plus the VWAP) by the close on Sept. 13, when these weekly options expire. This denotes expected upside of about 5.9% to the stock's present price at $293.37, as well as territory not explored since late July.
The delta for this call stands at 0.081, meaning it has an 8% chance of finishing in the money. However, even if the security remains south of the strike price throughout the option's lifetime, the most today's bulls risk forfeiting is the initial cash outlay. Also of note, the stock's Schaeffer's Volatility Index (SVI) of 23% ranks lower than 93% of comparable readings taken during the past year. In other words, AMZN's near-term options are relatively cheap right now.
On the technical front, Amazon.com, Inc. (NASDAQ:AMZN) has advanced almost 17% year-to-date, and has outpaced the broader S&P 500 Index (SPX) by more than 5 percentage points during the past three months. Additionally, the equity's recent pullback was cushioned by its 20-week moving average, which has served primarily as support since March 2012.
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