Is Amazon.com, Inc. (AMZN) Heading to All-Time Highs?

Amazon.com, Inc. (NASDAQ:AMZN) weekly calls are extremely popular today

Josh Selway
Apr 21, 2015 at 3:29 PM
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With the company's first-quarter earnings report scheduled for release Thursday evening, short-term options traders are rushing to Amazon.com, Inc. (NASDAQ:AMZN) today. In fact, the equity's seven most popular options all expire this Friday night. Leading the way is the weekly 4/24 420-strike call, where a mix of buy- and sell-to-open activity may be transpiring. Those purchasing the contracts are betting on the shares to surge past $420 -- record-high territory -- by this Friday's close, while the sellers are counting on the strike to act as a short-term technical ceiling.

On a volatility basis, AMZN's short-term options are somewhat expensive -- which isn't surprising, given that a big event is just around the corner. This, according to the stock's Schaeffer's Volatility Index (SVI) of 44%, which comes in higher than 79% of all similar readings from the past year.

If the reaction to Thursday's report is anything like what happened last time AMZN stepped into the earnings limelight, option bulls could be in luck. When the company presented results in late January, the shares surged 13.7% in the following session. If the security saw similar gains this time around, it would be trading around $446, based on its current price of $392.43.

Overall, Amazon.com, Inc. (NASDAQ:AMZN) has added 26.5% year-to-date, and earlier today touched an annual high of $394.60. On the Street, though, 14 analysts maintain tepid "hold" ratings on AMZN, so if it can continue its uptrend, more bullish analyst could be forthcoming .


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