Amazon.com, Inc. (AMZN) Option Sellers Set a Short-Term Top

Amazon.com, Inc. is seeing call-selling activity today

Digital Content Group
Dec 3, 2014 at 1:37 PM
facebook twitter linkedin


Amazon.com, Inc. (NASDAQ:AMZN) is sitting 3% lower this afternoon at $316.50, bringing its year-to-date deficit beyond 20%. Option players have taken notice, with the contracts trading at almost twice their typical intraday rate. What's more, the stock's 30-day at-the-money implied volatility has spiked 7% to 27.1%, signaling elevated demand for short-term strikes.

Drilling into the data, the weekly 12/5 320- and 325-strike calls are the most sought-after AMZN options. A solid portion of the volume at both strikes has crossed at the bid price, and volume tops open interest, suggesting possible sell-to-open activity. This theory is partially confirmed, thanks to data from the International Securities Exchange (ISE).

Traders writing to open these out-of-the-money calls are banking on limited upside for Amazon.com, Inc. (NASDAQ:AMZN) through the end of the week, when the series expires. Specifically, the sellers expect the shares to churn below the respective strike prices during the next couple of days -- allowing the contracts to expire worthless, and the traders to secure the initial premium received as their maximum potential profit.

Bernie's Best Stock Bets for Summer 2021

1608308875

 




 
Special Offers from Schaeffer's Trading Partners