I think Amazon (Ticker: AMZN) is due for a pullback after its little run from a June 7 low of $3,172.20 up to its high on Friday of $3,366.58, a 6% move this week.
Friday’s candle could be a doji signaling a change in this mini uptrend:
Since AMZN trades over $3,000, there aren’t any low dollar amount options to be had.
So, if it opens lower on Monday, I will consider buying the June 18 3,285/3,225 put spread and pay around $6.50 or less.
The 3,285 calls have an implied volatility of 18.12 and the 3,325 calls implied volatility is 21.27.
Since AMZN is such a high priced stock ,this can move very quickly and these options expire Friday, so the decay will be massive if the stock doesn’t move.
I will be watching it closely.
I will take my losses if the spread trades down to $4.50 and begin profit taking at the $10-$11 level.
I know this is an expensive spread compared to what I usually recommend, so you just do fewer contracts.
- I closed my Rocket Companies (Ticker: RKT) June 18 19.50-/29.89-strike call spread at $2.13 for a 104% win.
- My FuelCell Energy (Ticker: FCEL) June 18 12-strike puts, I sold at $2.28 for a win of 101%.
- In Plug Power (Ticker:PLUG) on Friday, the stock didn’t seem to want to go any lower. So I bailed on my puts at $2.13 for a 21% profit. Better to take the money than to let them turn into a loss. I can always re-enter!
Thanks for Reading … See You Next Tuesday!