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FAANG Stock Bulls Won't Want to Miss This Quarter

Options may be a smart way to play this stock's lofty price point

Digital Content Manager
Apr 8, 2021 at 2:20 PM
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E-tail behemoth Amazon. com, Inc. (NASDAQ:AMZN) is making headlines again today after over 3,200 employees in Bessemer, Alabama cast ballots in a union drive, marking a 55% voter turnout rate, according to a statement from the Retail, Wholesale and Department Store Union (RWDSU) on Wednesday. Workers had until March 29 to cast their ballots, with counts beginning the next day. Should those in favor of the union win out, it would mark the first union at any of Amazon's warehouses in the country -- a massive shift for a company that is historically anti-union. 

Wall Street doesn't appear phased by the news, and the stock looks like it's quickly brushing off last month's tech selloff as AMZN eyes its highest close since mid-February. The stock is up 1.1% to trade at $3,316.28 today, and has already added 7% so far in April. Needless to say, the equity has kicked off the spring season on the right foot, and according to historical data from Schaeffer's Senior Quantitative Analyst Rocky White, even more growth could be in store during the remainder of the second quarter. 

Drilling down to White's study, Amazon just landed on a list of 25 S&P 500 members with the best returns during the second quarter during the past 10 years. Data shows the stock notching a positive quarterly return 90% of the time, and averaging an impressive 13.9% pop -- the fifth highest move on the list. A similar swing from its current perch would put the security just above the yet-to-be-explored $3,777 level. 

best of q2

While Amazon's stock price is undoubtedly lofty, traders who want to speculate on its next move (and potential for even more record highs) might want to explore options. In fact, these premiums can be had at a relative bargain right now. This is because AMZN's Schaeffer's Volatility Index (SVI) of 22% stands below all but 1% of readings in its annual range, implying option traders are pricing in relatively low volatility expectations at the moment. 

 

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