M&A Talk Has Amazon (AMZN) Calls in High Demand

Amazon.com, Inc. (NASDAQ:AMZN) calls are crossing at three times the normal intraday pace, and nearly double the number of puts that have changed hands. Buy-to-open activity has been detected at the in-the-money weekly 3/27 367.50-strike call. These traders are looking for the shares to blaze a path further beyond $367.50 through tomorrow's close, when the series expires.

Call buying has been the trend in AMZN's options pits for the past few months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 1.25 lands in the 70th percentile of its annual range. In other words, the preference for buying calls over puts has been stronger than what's typically seen.

Today's rush to place bullish bets comes after rumors surfaced that the company could be in talks to buy fashion retailer Net-a-Porter.com. The firm also announced it will offer unlimited cloud storage for about $60 per year, and has expanded its Prime Now one-hour delivery service to Dallas, with additional cities forthcoming. Still, AMZN was last seen 0.8% lower at $367.87.

Widening the technical scope, though, reveals Amazon.com, Inc. (NASDAQ:AMZN) has been solid of late. Since the start of the year, the shares have added 18.5%. AMZN may be benefiting some from a short-squeeze situation, with short interest falling 24% in the past two reporting periods.