Amazon Options Fly While Stock Falls on Wells Fargo Analyst Downgrade

Amazon fell nearly 3% Monday after an analyst rating cut from Wells Fargo and a price target cut from $225 to $183. In part, after the news, Amazon's options flew to seventh place in the market, ranked by options contract volume.

One contract above the current going price was one of the highest traded. Investors swapped 36k contracts that give holders the right to buy AMZN at $185, at a going price of about $1/share for 100 shares. Those specific contracts expire on Friday. Overall, traders moved 669k contracts on Monday.

The contract price has been steadily decreasing alongside the underlying stock price.

The stock slid alongside other Magnificent Seven stocks, which have been facing declines in the past few months that make them seem less magnificent, Barrons writer Angela Palumbo said Monday. Amazon stock once stood out as a high-growth stock in a sea of uncertainty, but matches the mean where it once stood out it has only returned about 19% for the year, compared to the same from the S&P 500.

The movement comes at a time when Amazon needs good news. The firm faces an antitrust lawsuit with the FTC for allegedly stifling online retail competition. The suit, filed in multiple U.S. states, alleged that Amazon drove up prices paid by U.S. households by $1B with algorithms. A judge refused to throw out the case Monday.

Overall, the AMZN stock options ratio went 73:27 Calls to Puts.