, Inc. (AMZN) Streaming Speculation Sparks Heavy Options Trading, Inc. (NASDAQ:AMZN) is reportedly preparing a global launch of its streaming service, sending the shares higher -- and Netflix, Inc. (NASDAQ:NFLX) lower

Nov 18, 2016 at 10:44 AM
facebook twitter linkedin

News that, Inc. (NASDAQ:AMZN) will stream its "The Grand Tour" motor show in no fewer than 200 markets worldwide has sparked speculation Amazon is preparing a global launch of its Prime Video streaming service. AMZN stock settled higher on Thursday after the rumors began swirling -- while fellow streaming "FANG" stock Netflix, Inc. (NASDAQ:NFLX) continues to swoon -- with the shares last seen up 0.3% at $759.01. And while options volume is accelerated in early trading, a number of speculative players are betting that AMZN stock will run out of steam by day's end.

By the numbers, around 34,000 calls and 30,000 puts have changed hands on AMZN so far -- two times what's typically seen at this point in the session. Most active is the security's November 760 put, where it looks like some speculators may be purchasing new positions. If this is the case, the expectation is for AMZN to settle south of $760 at tonight's close, when the front-month options expire.

Widening the scope reveals that options traders have shown a growing affinity for long calls over puts in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, AMZN's 10-day call/put volume ratio has risen to 1.16 from 0.96 in the last two weeks, and now sits in the 64th annual percentile.

Regardless, AMZN has been heavily targeted by both call and put players. Drilling down on the numbers, 633,850 total contracts are currently outstanding on the stock -- 308,733 calls and 325,117 puts -- with each metric sitting in the 100th percentile of its respective annual range.

On the charts, AMZN has put in a stellar performance over the long term, up nearly 15% year-over-year. What's more, the tech stock's recent election-related pullback from its Oct. 6 record high at $847.21 was quickly contained by its rising 160-day moving average and the $710 level, which roughly coincides with a 50% return off its mid-February low at $474. A quick bounce from here on Monday has shares of, Inc. (NASDAQ:AMZN) on track to log an almost 3% weekly win.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners