Amazon Stock Pops on JEDI Contract Cancellation

Amazon was originally expected to lose the contract to Microsoft

Assistant Editor
Jul 7, 2021 at 9:30 AM
facebook twitter linkedin

The shares of Inc (NYSE:AMZN) are up 1% in pre-market trading, last seen at a fresh record high of $3,7111, following news that the U.S. Defense Department canceled the 10-year, $10 billion JEDI cloud-computing contract with Microsoft (MSFT). It was previously awarded to Microsoft in 2019. founder Jeff Bezos charged in court that former U.S. President Donald Trump intervened to make sure Microsoft won the JEDI Cloud contract due to personal distaste for Bezos.

On the charts, AMZN yesterday logged a record close of $3,675.74, or a daily surge 4.7%. Guided higher over the last month by the 20-day moving average, Amazon stock tacked on 14.6% in that time frame. Longer term, the security is up 20.2% year-over-year.

Elsewhere, the options pits have been much more bullish than usual in the past 10 weeks. This is per AMZN's 50-day call/put volume ratio of 1.66 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) , which stands higher than 99% of readings from the past year. 

Plus, the stock boasts affordably priced premium at the moment. This is per AMZN's Schaeffer's Volatility Index (SVI) of 26%, which stands higher than 19% of all other readings in its annual range. In simpler terms, this implies that options players are pricing in relatively low volatility expectations. 


Special Offers from Schaeffer's Trading Partners