Amazon.com, Inc. (AMZN): Fans Await New Show, Option Traders Await More Upside

Amazon.com, Inc. (AMZN) nabbed the rights to a new series featuring the former hosts of 'Top Gear'

by Andrea Kramer

Published on Jul 30, 2015 at 12:33 PM
Updated on Jun 24, 2020 at 10:16 AM

While Netflix, Inc. (NASDAQ:NFLX) may have more Emmy nods, one thing it doesn't have is the global rights to a new unscripted series about cars, featuring Jeremy Clarkson and his former "Top Gear" team. That belongs to Amazon.com, Inc. (NASDAQ:AMZN).

Amazon's Prime Instant Video won the bidding war for the series, which is set to premiere for Prime members in 2016. The news seems to confirm that Clarkson won't be back for another season of BBC's long-running "Top Gear" show, from which he was fired in March.

On the charts, AMZN is defying the broad-market swoon, up 1% at $534.34. The stock has been unstoppable in 2015, advancing 72%, and just notched a record best of $580.57 on July 24, thanks to a big post-earnings bull gap. 

Off the charts, AMZN is attempting to be a jack of all trades. The company is toying with a drive-through grocery project, and its successful cloud service is now drawing competition from Alibaba Group Holding Ltd. (NYSE:BABA).  (And it seems fair to say AMZN probably learned a few lessons from the Prime Day bust.) 

Although the shares of AMZN now sport a 14-day Relative Strength Index (RSI) of 79 -- in overbought territory -- option bulls haven't let up. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.29 AMZN calls for every put during the past two weeks. This ratio sits higher than three-quarters of all others from the past year, pointing to a healthier-than-usual appetite for long calls of late. 

In the past five days, the security's August 630 and 650 calls have attracted the most attention, with open interest jumping by more than 10,000 contracts at each strike. In order for the calls to move into the money, Amazon.com, Inc. (NASDAQ:AMZN) would have to skyrocket north of the strikes -- a rally of 18% and 21.6%, respectively, from current levels -- by the close on Friday, Aug. 21, when front-month options expire. But, as Schaeffer's Senior Quantitative Analyst Rocky White recently noted, the last time AMZN saw a huge single-day spike, the shares rallied almost 19% in the next three months, despite the S&P 500 Index (SPX) declining.


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