Shopify Stock Pops on Amazon Partnership

Call traders are chiming in on the news

Deputy Editor
Aug 31, 2023 at 10:34 AM
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Shopify Inc (NYSE:SHOP) stock is on the rise, after the e-commerce company announced U.S. shoppers will have the option to use Amazon's (AMZN) "buy with prime" option, giving merchants access to Prime benefits such as free shipping and fast delivery. At last glance, SHOP was up 6.7% at $64.01. 

This pop has the stock firmly above all notable short- and long-term moving averages, including its 40-day trendline, which it dropped below at the start of the month. Moving back toward its July 14 one-year high of $71.43, the equity is up 84.6% since the start of the year. 

Options bulls are targeting Shopify stock after the news. So far, 62,000 calls and 22,000 puts have been exchanged, which is four times overall options volume typically seen at this point. The weekly 9/1 65-strike call is the most popular by far, with new positions opening there. 

The options pits have been optimistic over the last 10 weeks as well. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SHOP's 50-day call/put volume ratio of 2.75 ranks higher than 86% of readings from the past year. 

These options traders are pricing in extremely low volatility expectations at the moment, too. SHOP's Schaeffer's Volatility Index (SVI) of 39% sits in the lowest percentile of its annual range. 

 

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