Options Traders Eye Struggling FAANG Stock

Year-to-date, AMZN is down more than 37%

Digital Content Manager
Jun 13, 2022 at 10:19 AM
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The tech sector is taking a beating today, extending Friday's selloff after the consumer price index (CPI) for May revealed an 8.6% year-over-year rise -- the fastest since 1981. The data stoked fears of a potential economic recession, as well as more aggressive interest rate hikes. In turn, Amazon.com, Inc. (NASDAQ:AMZN) is the worst-performing FAANG stock today, last seen down 3.2% at $106.12, as investors rotate out of growth stocks and into bonds.

Digging deeper, the equity is now on track to log its third-straight close back below the 30-day moving average. Shares pivoted lower after the $129 level rejected last week's rally, and are now nearing their May 24, roughly two-year low of $101.26. Year-to-date, AMZN is down 37.1%.

Analysts remain firmly bullish towards the e-tailer, with 27 of the 29 in question calling it a "buy" or better. In addition, the 12-month consensus target price of $178.14 is a 69.9% premium to current levels.

Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Amazon.com stock's 10-day call/put volume ratio of 1.66 ranks higher than 70% of readings from the past year. This means calls have been picked up at a quicker-than-usual pace.

Drilling down to today's options activity, 134,000 calls and 100,000 puts have crossed the tape, or triple the intraday average. The most popular contract is the June 110 call, followed by the 105 put in the same series.

For those looking to weigh in, options look like a solid move at the moment. According to its Schaeffer's Volatility Scorecard (SVS) tally of 88 out of 100, AMZN has consistently realized bigger returns than options traders have priced in over the last 12 months.

 

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