Amazon Calls Remain Red-Hot Despite Logistics Probe

The stock is nearly 16% off its mid-July peak

Deputy Editor
Nov 18, 2019 at 2:57 PM
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The shares of Amazon.com, Inc (NASDAQ:AMZN) are waffling around breakeven today, slightly higher at last check to trade at $1,738.34. This comes after Bloomberg reported over the weekend allegations from European Union antitrust regulators that the e-tail giant is prioritizing merchants who utilize its warehouse and delivery systems with higher visibility. This most recent accusation comes amid the European Commission's probe into Amazon supposedly linking its marketplace and logistics service together. 

AMZN puts and calls are crossing the tape at a slightly quicker-than-usual clip today, with 63,000 calls and 44,000 puts exchanging hands so far. The most popular contract is the weekly 11/22 1,750-strike call, with contracts being sold to open here, followed by the weekly 11/22 1,740-strike put, where sell-to-open action is also taking place. 

This frenetic options activity is nothing new for AMZN, though. In fact, the FAANG name just popped up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within this time period, with names highlighted in yellow new to the list. In the past 10 days, 230,033 weekly calls and 170,756 weekly puts have been traded. 

Most Active Options NOv 18

The recent reach towards bullish bets is somewhat unusual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) AMZN's Schaeffer's 10-day call/put volume ratio of 1.35 ranks in the 86th percentile of its annual range. This suggests a much healthier appetite for calls over puts of late. 

It's more of the same among the brokerage bunch, where only one in coverage considers the stock a "hold," compared to 28 that give it a "buy" or better rating. What's more, the consensus 12-month target price of $2,183.86 represents uncharted territory for AMZN.

Some of this optimism could unwind, should the security's recent negative price action continue. While the equity is still up nearly 16% year-to-date, it's nearly 15% down off its mid-July peak, with its last two attempts to rally back north of the $1,800 region thwarted by the 200-day moving average. Now, AMZN is once again staring down the $1,700 region, which has caught several recent pullbacks on the charts. 

AMZN Chart Nov 18


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