Amazon.com, Inc. (AMZN) Bulls Ignore FAA Ruling

Some are still betting on Amazon.com, Inc. (AMZN) after the FAA's drone regulations

Digital Content Group

Feb 17, 2015 at 10:57 AM

AMZN

Amazon.com, Inc. (NASDAQ:AMZN) is down 1.9% today at $374.48, after the Federal Aviation Administration (FAA) announced new regulations that will hamper the company's use of drones to deliver packages. Some speculators are expecting the shares to rebound, however, as buy-to-open behavior has been detected at the February 390 call -- AMZN's most popular contract. Specifically, these traders are betting on the equity to eclipse $390 for the first time since late-January 2014 by week's end, when front-month options expire.

It's nothing new to see AMZN options trader buying to open calls. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has racked up a call/put volume ratio of 1.43, which is higher than 87% of similar readings from the past year.

Most analysts have a favorable outlook on the shares, as well. There are 28 brokerage firms covering the security, and 16 of them deem it a "buy" or better.

Overall, it's been a solid year for Amazon.com, Inc. (NASDAQ:AMZN) on the technical front. The stock has added nearly 21%, thanks in part to last month's earnings-induced surge.

Weekly Chart of AMZN Since January 2014 With $390 Level

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!