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Is Amazon.com, Inc. (AMZN) Worth a $51 Million Call Options Bet? Dan Nathan

Amazon.com, Inc. (NASDAQ:AMZN) has lately become synonymous with disappointing Earnings Releases, and as a result a drop in the stock price that follows most of these reports. However, the e-commerce giant has a story that some ardently believe in. On CNBC, Dan Nathan reported on the latest move of one such trader who must be an avid supporter of the Amazon.com, Inc. (NASDAQ:AMZN)’s thesis.

Amazon.com (NASDAQ:AMZN), The Washington Post (NYSE:WPO), Berkshire Hathaway Inc. (NYSE:BRK.A), Apple Inc. (NASDAQ:AAPL)

” […] This is January 2017 expiration. Somebody bought 7,000 of the January 17th $300 calls. They paid $72 for those. It’s $51 million in premium and basically what that trader is doing, I suspect that they are basically replacing a long stock position with calls, redefining their risk to $72 […],” reported Nathan.

To put things in perspective, the trader is basically betting on a 17.5% increase in Amazon.com, Inc. (NASDAQ:AMZN)’s stock price in about 14 months. Actually even more, since that percentage would only get Amazon to $372 which is only the breakeven price for the trade. The stock is currently up about 0.16% in the pre-market trading and was trading at $316.48 at the last closing bell.

Amazon.com, Inc. (NASDAQ:AMZN)’s CEO, Jeff  Bezos, might have a failed smart phone, Amazon Fire Phone, and a dispute with the publishing company Hachette on his hands, but that still might not be enough to break his spirit. In fact far from it. His plans on dominating the world of e-commerce still remain intact.

He wants to fly Amazon.com, Inc. (NASDAQ:AMZN) on the fuel of razor thin margins and a business that reaches all four corners of the world. He might have some problems with the Eastern end though, in this regard. From the looks of it, China’s Alibaba is too vast to succumb and has the ability to swallow an Amazon.com, Inc. (NASDAQ:AMZN) or two, just based on its market capitalization.

However, this world is a vast place and many including the trader with a $51 million bet on the company think that a significant part of it will belong to Bezos’ company in the future.


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