AMZN) shares are up another 74.9% in the past year, but at least one larger option trader is betting its recent rally may come to an end soon.
Benzinga Pro subscribers received an option alert related to an unusually large Amazon trade.” data-reactid=”20″>The Amazon Trade: On Wednesday morning, Benzinga Pro subscribers received an option alert related to an unusually large Amazon trade.
At 11:28 a.m., a trader bought 407 Amazon put options with a $3,100 strike price expiring on August 21 near the ask price at $50.011. The trade represented a more than $2.03 million bearish bet.
Many of these large options traders are wealthy individuals or institutions who may have unique information or theses related to the underlying stock.
Unfortunately, stock traders often use the options market to hedge against their larger stock positions, and there’s no surefire way to determine if an options trade is a standalone position or a hedge. In this case, given the relatively large size of Wednesday’s Amazon option trade it could certainly be institutional hedging.
The shelter-in-place environment has created booming demand for Amazon’s e-commerce and cloud services business, and Amazon is gaining huge chunks of market share from brick-and-mortar competitors. However, the stock’s 4.5% post-earnings gain has pushed Amazon’s market cap to $1.6 trillion, and some traders may see limited additional near-term upside and the potential for an aggressive pullback at some point.
AMZN Chart by TradingView new TradingView.widget( { "width": 680, "height": 423, "symbol": "NASDAQ:AMZN", "interval": "D", "timezone": "Etc/UTC", "theme": "light", "style": "1", "locale": "en", "toolbar_bg": "#f1f3f6", "enable_publishing": false, "allow_symbol_change": true, "container_id": "tradingview_29861" } );” data-reactid=”31″> AMZN Chart by TradingView new TradingView.widget( { “width”: 680, “height”: 423, “symbol”: “NASDAQ:AMZN”, “interval”: “D”, “timezone”: “Etc/UTC”, “theme”: “light”, “style”: “1”, “locale”: “en”, “toolbar_bg”: “#f1f3f6”, “enable_publishing”: false, “allow_symbol_change”: true, “container_id”: “tradingview_29861” } );
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