Amazon (AMZN) Options Signal $220 Support Battle: Bull Call Spread vs Bear Put Play as OpenAI Deal Looms

• AMZN trades at $224.11, up 0.7% with volume surging to 5.7M shares
• Options data shows 59,959 open calls at $260 strike vs 23,858 puts at $220
• BMO Capital raises $378 price target; OpenAI $10B investment talks ongoing

Here’s the thing: AMZN’s options market is locked in a tug-of-war between cautious bears and opportunistic bulls. The stock sits near its 200D MA ($215.33) while OpenAI’s potential $10B investment creates a wildcard for AWS growth. Let’s break down what the numbers really mean.

The Options Imbalance: A Tale of Two Strikes

AMZN’s options chain tells a story of divided sentiment. Call open interest peaks at the $300 strike (51,401 contracts), a 34% premium over current price, while puts dominate at $220 (23,858 OI). This suggests institutional players are hedging against a potential $220 support break but also eyeing a rally to $300 if the OpenAI deal closes. The put/call ratio of 0.70 (favoring calls) hints at a subtle bullish tilt, though the MACD (-1.63) and RSI (37.43) still show bearish momentum.

Block trades add intrigue: A 830-contract put block at $240 (expiring Nov 21) and a 500-contract call buy at $250 (Jan 16) signal big players are positioning for both near-term volatility and longer-term AI-driven growth. Think of it like a chess game—some are betting on a quick checkmate, others on a slow grind.

News That Could Tip the Scales

OpenAI’s $10B investment isn’t just a headline—it’s a catalyst. If finalized, it would validate AWS’s AI chip strategy and potentially push AMZN toward BMO’s $378 target. But here’s the catch: The stock’s 30D MA ($232.76) is a ceiling right now, and the RSI hasn’t cracked 40 in weeks. Retail investors might be tempted to chase the AI narrative, but the technicals warn of a bumpy ride. Insider selling ($19M in 90 days) also adds a layer of caution—like a captain jettisoning cargo to stay afloat.

Actionable Trades: Bull Call Spread vs Bear Put Play

For options traders: A bull call spread using the AMZN20251226C235 ($235 strike, 15,282 OI) and AMZN20251226C245 ($245 strike) offers defined risk if AMZN breaks above its 30D MA. The $235 call expires next Friday (Dec 26) and costs ~$1.20/share, with maximum profit at $245. For bears: The AMZN20251226P220 put (7,275 OI) becomes a key play if price drops below $223 (support zone), with a stop-loss near $227.

Stock traders: Consider entry near $223 if the 200D MA holds, targeting $227 (Bollinger Middle Band) as a first target. A break below $220 would trigger a reevaluation—this is where the puts at $220 could force a short-covering rally.

Volatility on the Horizon

AMZN isn’t just a stock—it’s a barometer for AI’s future. The OpenAI deal could be the spark that ignites AWS growth, but technical indicators warn of a potential pullback before a breakout. Position yourself at the $220-$223 pivot zone: If the bulls hold, the $235-$245 range becomes a goldmine. If they falter, the puts at $220 could become a lifeline. Either way, this week’s options activity shows the market is bracing for a decision point.

Bottom line: AMZN’s next move hinges on whether the OpenAI deal turns hype into hard cash flow. For now, treat $220 as a floor and $235 as a ceiling—trade the range, but keep an eye on the AI wildcard.