$AMZN call buyers score big gains

$AMZN call buyers score big gains


Option traders are posting big gains today as Amazon.com (AMZN) rises.

On Jul. 21Market Rebellion’s Unusual Option Activity Service found that 17,000 Weekly $130 calls, expiring Aug. 4, were bought as part of a bullish spread for $5.86 to $5.91 with shares at $130.14. This was clearly fresh buying, as open interest in the contract was just 2,772 before the activity appeared.

Those calls have changed hands for as much as $13.55 this session, a 129.27% return, while the stock rose 10.31% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

AMZN was last up by 10.26% at $142.14.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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