Black Friday Buzz Entices Amazon.com, Inc. (AMZN) Bulls

Amazon.com, Inc. (AMZN) will start offering Black Friday specials one week ahead of the competition

by Alex Eppstein

Published on Nov 18, 2015 at 2:45 PM
Updated on Jun 24, 2020 at 10:16 AM

With Thanksgiving week just around the corner -- and plenty of stocks poised to rally, from a seasonal perspective -- retailers are gearing up for the most important day of the year: Black Friday. But while most product peddlers wait until the night of Thanksgiving, or the day after, to offer doorbuster sales, Amazon.com, Inc. (NASDAQ:AMZN) is trying to beat its competition to the proverbial punch. Specifically, the e-tailer will begin featuring holiday deals this Friday.

The news is being met with applause on the Street, as AMZN shares are currently 2.3% higher at $658.30 -- bringing their 2015 advance to a mind-boggling 112%. Option traders don't see the momentum stopping, either. Currently, the two most active strikes are the November 655 and 660 calls, where it appears new positions are being purchased -- as speculators wager on more end-of-week upside.

This isn't the first time these strikes have been in focus. In fact, during the past two weeks, both calls rank among the 10 AMZN strikes that have seen the biggest changes in open interest. Specifically, the in-the-money call has added 2,123 positions, while the out-of-the-money strike has tacked on 1,923 -- and data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms buy-to-open action transpiring, especially at the former.

From an even wider perspective, call buying has been running at an uptempo speed. AMZN's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.33 ranks in the 81st percentile of its annual range. In other words, option players have preferred bullish bets over bearish by a significant margin in recent weeks.

While it remains to be seen whether Amazon.com, Inc. (NASDAQ:AMZN) will advance by front-month expiration this Friday night, chances are good the stock will take off next week. During the past 10 Thanksgiving weeks, the shares have been positive 80% of the time, with a typical gain of 3.2%.

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