Amazon's Options Market Sees Tug of War Between Bulls and Bears
There's a tug of war between the bulls and the bears playing out in $Amazon (AMZN.US)$'s options market as the stock of the ecommerce and cloud infrastructure giant struggles to find a direction.
Unusual trades posted Thursday showed eight block transactions, including four positions that were bearish, three bullish and one neutral. The biggest of them was multi-leg transaction worth millions of dollars that had both a bullish and a bearish position.
The first leg of that trade involved an active seller collecting a $13.26 million premium for writing call options giving the holders the right to buy 972,000 Amazon shares at $175 each by Oct. 18. The other leg involved an active buyer paying a premium of $11.37 million for Amazon call options that give the holders the right to purchase the same number of shares at $185 by Nov. 15. The trades were posted at 10:23:18 a.m. in New York Thursday, according to data compiled by moomoo.
The first leg of that trade involved an active seller collecting a $13.26 million premium for writing call options giving the holders the right to buy 972,000 Amazon shares at $175 each by Oct. 18. The other leg involved an active buyer paying a premium of $11.37 million for Amazon call options that give the holders the right to purchase the same number of shares at $185 by Nov. 15. The trades were posted at 10:23:18 a.m. in New York Thursday, according to data compiled by moomoo.
That tug of war between the bulls and bears has also been playing out in the broader market as investors parse through economic data for clues on the magnitude of the interest rate cuts that the U.S. Federal Open Market Committee (FOMC) could implement as next week's meeting. Optimism over the outlook of the stock market has been tempered by concerns that slowing economic growth could crimp corporate profits.
On Wednesday, the tech-heavy $Nasdaq Composite Index (.IXIC.US)$, which counts Amazon among its constituents, slipped during morning trade, before wiping out those declines and closing 2% higher.
By midday Thursday, more than 309,500 Amazon options changed hands, landing it in the fifth slot for the most active stock options, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$, $Broadcom (AVGO.US)$ and $Apple (AAPL.US)$. (To see the options ranking, click here.)
The heaviest volume in the Amazon options market is in call options that give the holders the right to buy the stock at $187.50 by the close of trading tomorrow. Almost 26,000 calls changed hands so far, more than triple the open interest. That contract traded between a high of 99 cents and a low of 26 cents before reaching 36 cents at 12:10 p.m. Thursday.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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102928701 : Thank you![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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well presented and explanatory
Rockmanxdi : There needs to be a pullback to 160 before reaching 190.