Amazon Unveils Another Whole Foods Perk for Prime Members

Options traders are put-skewed toward outperforming AMZN stock

Managing Editor
Aug 8, 2018 at 9:41 AM
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Shares of online powerhouse Amazon.com, Inc. (NASDAQ:AMZN) are slightly lower in early trading after the company launched a curbside grocery pickup for Prime members at select Whole Foods stores. The initiative will be tested at select locations in California and Virginia. AMZN is down 0.2% at $1,858.78, at last check, keeping pace with a shaky start for the broader equities market.

Despite this morning's slight setback, Amazon stock is continuing its long-term climb on the charts, after setting a fresh record high of $1,880.05 on July 27. Recent pullbacks have been contained by the supportive 30-day moving average, and at last check, AMZN was sporting a 59% year-to-date gain. 

Looking toward options data, Amazon stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.09, ranking just two percentage points from an annual high. This suggests that during the past two weeks of trading, puts have been bought over calls at a faster-than-usual clip.

Echoing this, AMZN's Schaeffer's put/call open interest ratio (SOIR) of 1.19 surpasses 94% of comparable readings from the past year. This elevated SOIR reveals that puts outnumber calls by a wider-than-usual margin among options set to expire within three months.

Some of this put skew could be the result of Amazon shareholders using protective options to lock in paper gains -- and right now is an affordable time to do so. This is per the equity's Schaeffer's Volatility Index (SVI) of 17%, which ranks in the 2nd annual percentile -- meaning near-term options are pricing in relatively low volatility expectations at the moment.
 

 

 

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