Amazon Attracts $380 Million in Block Trades for Call Options
$Amazon (AMZN.US)$'s options market attracts financial giants betting a combined $380 million for calls that give the holders the right to buy the stock at a specified strike price.
At exactly 12:06:29 p.m. in New York Thursday, three block trades were posted. The biggest was for calls that give the holder the right to buy 7.7 million Amazon shares at $175 by Sept. 20, data compiled by moomoo showed. The seller stands to collect a premium of $191.27 million for writing the calls.
At that exact time, another block trade was posted, this time for call options that give the holder the right to buy 3.4 million shares of the tech giant for $160 each by June 21. The seller stands to collect a premium of $107.2 million for writing the call options.
The remaining block trade was for call options that give the holder the right to buy 2.6 million shares at $160 also by June 21. The seller stands to collect a premium of $81.95 million for writing the calls.
While the identity/identities of the buyer/buyers are unknown, do you think these calls will end up getting exercised before they expire? If they do, the seller may need to deliver these stocks. Let me know your thoughts.
Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Moomoo Senior News and Community Manager
Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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70024960 : if they are selling calls options, they know why. and they are betting that amzn will drop below or remain relatively flat on the expiration dates.
Lauren Kattuah : They sold the $175 and $160 calls because they’re expecting the stock to go below the strikes so that they can exercise the right to buy them. I hope the contract stay in the money so that they do not get the chance to buy them that cheap.
Lauren Kattuah : I really was expecting Amazon to break out to new all-time highs. This is more than a quadruple top in this area and it is painful for a long-term shareholders to watch other stocks break out to new all-time highs while Amazon hasn’t had a “Meaningful” all-time high since 2020. It’s not fair that the market maker and the options dealer can bow down to these block trades to keep the stock down so these clowns can accumulate cheap shares and collect the premium of the short calls.
IanGC : If Amazon is dropping then great time to purchase more. It will ultimately rise. E-commerce will grow.