$AMZN call buyers score

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

On Jul. 25Market Rebellion’s Unusual Option Activity Service found that 25,000 Weekly $130 calls, expiring next Friday, were bought for $0.62 to $1.02 as part of a bullish spread with shares at $114.86. This was clearly fresh buying, as open interest in the contract was just 5,944 before the activity appeared.

Those calls have changed hands for $8.30 this session, at least 8 times their purchase prices. The stock rose 19.8% 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 12.2% at $137.20.

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Chris Sykora

Chris Sykora is an Unusual Option Activity Analyst and Cryptocurrency editor for Market Rebellion.