Options Traders Target Rare Amazon Stock Pullback

There's heavy options trading, both calls and puts, on Amazon today

Josh Selway
Sep 17, 2018 at 2:17 PM
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Amazon.com, Inc. (NASDAQ:AMZN) is having one of its worst trading days since July, last seen down 2.3% at $1,924.70, amid news the company is investigating reports that employees were taking bribes from the site's merchants to boost sales. Meanwhile, a note out of Citi is making the rounds, in which it said the e-commerce giant could announce a spin-off as a way to avoid regulatory scrutiny. With AMZN shares trading just above their 50-day moving average, options trading is popular on both sides of the aisle.

amzn stock chart

Jumping in, more than 110,000 AMZN call options have traded, compared to fewer than 90,000 puts, though volume for both is running above the expected pace. On the call side, new positions are being opened at the September 1,950 and 1,970 calls, while new positions are also opening at the September 1,920 put.

This slight call-skew is just more of the same from the equity, though, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing 196,882 calls bought to open during the past 10 days, compared to 171,726 puts. Overall, total open interest on Amazon is at 924,497 contracts, ranking in the 96th annual percentile.

Those looking to place a short-term options trade on AMZN may want to target calls over puts, judging by the 30-day implied volatility skew of 13.6%, which ranks just 2 percentage points from a 12-month high. This high percentile rank shows that short-term calls have rarely attracted lower premiums relative to short-term puts.


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