Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: umbro who wrote (25570)	11/11/1998 6:31:00 PM
From: umbro	Read Replies (3) \| Respond to of 164684

AMZN options report for 11/11/98 AMZN price: 126.625 Options Study for: NOV put break-even: 118.67 OI = 18644 VOL = 5406 call break-even: 130.23 OI = 21623 VOL = 4888 max. pain: 119.95 R = 0.9 R = 1.1 Options Study for: DEC put break-even: 111.31 OI = 3149 VOL = 619 call break-even: 140.20 OI = 3345 VOL = 831 max. pain: 124.93 R = 0.9 R = 0.7 Options Study for: JAN put break-even: 102.75 OI = 5046 VOL = 196 call break-even: 145.20 OI = 9460 VOL = 351 max. pain: 100.04 R = 0.5 R = 0.6 Options Study for: APR put break-even: 97.04 OI = 2490 VOL = 451 call break-even: 156.09 OI = 2613 VOL = 47 max. pain: 125.07 R = 1.0 R = 9.6 net long/short: 0.77 mil. i.v. for NOV = 0.74 i.v. for DEC = 0.82 i.v. for JAN = 0.89 i.v. for APR = 0.91 A little over one week from expiration, and the "max pain" calculation is calling for a close at the 120 level on Nov. 20. The implied volatility picture is taking on the more classic picture of volatility increasing as the options move further out in time. Lots of volume in the April puts today ... 200 traded at the 140 strike for a cost of $36.50 (which sets the break-even at expiration at 104) The at-the-money April 125 puts traded at an implied of 90% and cost $27. Given AMZN's volatility, and unpredictability, long straddles are looking interesting, especially if you're wllling to "leg out" of them. Although if you'd held the Nov 135 straddle (long a Nov 135c and long a Nov 135p), you'd have lost 0.50 close-to-close, there was a potential $3 profit on the initial $14 investment if you'd tried to time the moves. For a hypothetical trade, watch the Nov. 125c at $7.50 ask, and the Nov 125p at $5.50 ask. Look to fade the opening move (if AMZN gaps down, then dump the put, or if it gaps up, dump the call), and then look for a favorable exit on the other side.