Amazon Bounces Back from YouTube Spat with New FAANG Deal

Options traders and analysts alike are in the bullish camp on Amazon stock

Managing Editor
Dec 6, 2017 at 10:01 AM
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Shares of tech powerhouse Amazon.com, Inc. (NASDAQ:AMZN) are in focus today, as traders digest the online retail giant's partnership with Apple (AAPL) to include its Prime Video app on Apple TV. This news follows Tuesday's escalation in the Amazon-Google rivalry, which saw Google yank its YouTube content from Amazon's Echo Show and Fire TV platforms in retaliation for the lack of Google hardware available on Amazon.com.

AMZN is up 0.4% at $1,146.09 in early trading. The FAANG stock is extending a bounce from its 30-day moving average, bringing its year-to-date gain to 52.8%.

Options traders have shown a preference for AMZN calls over puts during the past two weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Amazon stock with a 10-day call/put volume ratio of 1.19, ranking in the 85th percentile of its annual range.

From a broader standpoint, speculation on the retail behemoth is nearing climactic levels. Total open interest of 784,101 put and call contracts registers in the 91st percentile of its annual range, per Trade-Alert, as AMZN open interest levels have rarely been higher in the past 52 weeks. However, open interest accumulations are fairly modest on individual strikes; the most heavily populated option right now is the out-of-the-money January 2018 1,200-strike call, with 9,066 contracts in residence.

Elsewhere, brokerage firms are almost unanimously optimistic on the equity. Currently, 33 of the 36 brokerage firms following AMZN carry "buy" or "strong buy" ratings.

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