New Options Trading for Amazon: Analyzing April Contracts
Investors in Amazon.com Inc (Symbol: AMZN) can now engage with new options trading, effective today, for contracts expiring on April 25th. At Stock Options Channel, our YieldBoost formula has identified key contracts on the AMZN options chain, highlighting both a put and a call contract of significant interest.
Put Contract Analysis at $195 Strike Price
The put contract at the $195.00 strike price carries a current bid of $4.90. Investors opting to sell-to-open this put would agree to buy AMZN shares at $195.00 while collecting the premium. This arrangement effectively lowers the cost basis of the shares to $190.10, excluding broker commissions. For those interested in acquiring AMZN shares, this could be a more enticing alternative compared to the market price of $204.62 per share.
This $195.00 strike reflects about a 5% discount from today’s trading price, indicating the possibility of the put expiring worthless. Current analytical data, including the greeks and implied greeks, estimate a 69% likelihood of this scenario occurring. Stock Options Channel will monitor these odds, providing updates through a chart on our website under this contract’s detail page. If the put expires worthless, the premium yields a 2.51% return on the cash commitment, annualized at 18.36% — a metric we term YieldBoost.
Trading History Context for $195 Strike
Below is a chart depicting the trailing twelve-month trading history for Amazon.com Inc, emphasizing the $195.00 strike within this context:
Call Contract Analysis at $210 Strike Price
Shifting to the calls side, the call contract at the $210.00 strike price has a current bid of $7.40. An investor purchasing AMZN shares at the current price of $204.62 per share and subsequently selling this call as a “covered call” would obligate themselves to sell the stock at $210.00. Including the premium, this could yield a total return of 6.25%, provided the stock is called away at the April 25th expiration (excluding any dividends and broker commissions). However, significant upside may remain unclaimed if AMZN shares experience substantial growth. Thus, analyzing the trailing twelve-month trading history and the company’s fundamentals is crucial.
Below is a chart illustrating AMZN’s trailing twelve-month trading history, with the $210.00 strike highlighted:
The $210.00 strike price reflects an approximate 3% premium over the current trading price, meaning there is also a chance for the covered call to expire worthless, allowing the investor to keep both their shares and the premium received. Current data suggests a 54% probability of this outcome. At Stock Options Channel, we will track and publish changes to these odds over time, alongside historical charts of the option contract.
If the call contract expires worthless, the premium represents a 3.62% additional return for the investor, annualized at 26.42%, also categorized as YieldBoost.
Volatility Overview
The implied volatility of the put contract is 34%, while that of the call contract rests at 33%. In contrast, our calculations reveal the actual trailing twelve-month volatility—considering 250 days of closing values and today’s price of $204.62—to be 28%. For additional insights on put and call options worth exploring, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
