Amazon Sees Heavy Buying of $175 Calls as Shares Rally After Retail Sales Data
$Amazon (AMZN.US)$ is seeing heavy buying of call options that give the holders the right to buy the stock at $175 by Friday. That mirrors the rally in shares amid signs of continued strength among U.S. consumers, bolstering the investment appeal of the largest e-commerce platform.
As of 1:30 p.m. in New York, more than 42,990 of those $175 calls changed hands, exceeding open interest which totaled 26,840. Amazon's 3.6% gain to $176.23 meant the calls are now in the money. The surge in volume may include those who sold covered calls and are now buying them back so they wouldn't be required to sell their shares and miss any potential upside.
Before trading opened Thursday, the Commerce Department released its advance estimates that show U.S. retail and food services sales rose 1% to $709.7 billion in July from a month earlier. That outpaced the 0.3% expected by economists surveyed by Dow Jones, according to a CNBC report.
Retailer $Walmart (WMT.US)$ also reported a 4.8% gain in revenue in the second quarter, and raised its full year outlook, adding to evidence of continued strength among consumers. (To see Walmart's options chain, click here.)
Amazon is also getting a lot of love from hedge funds and all kinds of institutional investors. Those investors boosted their stake in Amazon by 125.3 million shares in the second quarter, the most among consumer discretionary stocks, according to data compiled by Bloomberg from 6,951 13F filings with the Securities and Exchange Commission as of Thursday morning. That increased the filers' Amazon holdings to 5.73 billion shares, with a combined value of $1.1 trillion as of their filing data, according to the latest data.
Across all Amazon options in 21 expiration dates stretching through Dec. 18, 2026, the most heavily traded Thursday was the $180 calls, with volume reaching 81,940. The $180 calls expiring in one day saw the price climb 567% to 73 cents. That may signal optimism that the share price could extend gains by tomorrow, moving that contract from being out of the money to in the money.
(To see Amazon's options chain, click here.)
Among those adding to their Amazon holdings is billionaire Ray Dalio's Bridgewater Associates, which owned 2.65 million shares, as of June 30, up from 1.05 million three months earlier, according to its 13F filings with the SEC. The 13F filings of all institutional investors reflect their positions as of June 30 and may have changed since then.
As of 1:23 p.m., fund inflows into the stock outpaced outflows by $406.8 million, capital trend data tracked by moomoo showed. That lifted this month's net inflow to $1.52 billion, after a $520.5 million net outflow in July.
Total volume, including all call and put options across the 21 expiration dates, reached 648,630 contracts, making Amazon fourth most active stock options, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$and $Apple (AAPL.US)$. (To see the options ranking, click here, and the options market page here.)
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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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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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