Amazon (AMZN) Options Signal Bullish Bias: Key Strike Levels and Trade Setups for Dec 12–19 Expirations

• AMZN trades at $228.09, up 0.53% from yesterday’s close, with volume surging to 10.7M shares.
• Open interest shows 2.8M calls vs. 1.9M puts (put/call ratio: 0.705), favoring bullish bets.
• Block trades highlight $240 puts (Nov 21) and $250 calls (Jan 16), hinting at strategic hedging.

The options market is whispering optimism, but technicals warn of short-term volatility. Here’s how to navigate it.Bullish Sentiment in Options, But Watch for Near-Term Volatility

Let’s start with the elephant in the room: the open interest (OI) imbalance. For this Friday’s expirations (Dec 12), the top OTM calls are clustered at $235–$242.5, with the $235 strike alone holding 23,667 contracts. That’s not just noise—it’s a crowd betting on a near-term pop. Meanwhile, puts at $225 and $220 have 15,980 and 8,970 OI, respectively, suggesting some downside protection is in play.

But here’s the twist: the next Friday’s expirations (Dec 19) tell a different story. Calls at $260 ($60 above current price) lead with 60,999 OI, followed by $270 (52,786 OI) and $300 (50,516 OI). That’s not just bullish—it’s aggressively bullish. Big money is positioning for a material move, possibly tied to AWS’s AI hardware rollout or Q4 earnings.

Block trades add intrigue. A 830-lot of $240 puts (expiring Nov 21) and a 500-lot of $250 calls (Jan 16) suggest institutional players are hedging or scaling up for longer-term bets. The $240 put block, in particular, could signal a hedge against a short-term pullback, while the $250 call block reflects confidence in Amazon’s AI-driven growth.

News Flow: AI Chips and Earnings Revisions Fuel Optimism

Amazon’s recent headlines are a mixed bag. On one hand, the Trainium 3 AI chip launch and AWS’s AI infrastructure bets are huge positives. Analysts at KeyBanc and Zacks are piling on, with price targets as high as $303 and a DCF model suggesting undervaluation by 25%. On the other hand, the stock’s flat 1-year return and regulatory headwinds can’t be ignored.

Here’s the key: the options market is pricing in the potential of these news items, not their certainty. The $260–$300 call OI suggests traders expect AWS’s AI push to translate into earnings power. But if macroeconomic fears or regulatory delays resurface, the $225–$220 put OI could act as a safety net.

Actionable Trade Ideas: Calls for the Bold, Puts for the Pragmatic

Let’s get practical. For the bullish crowd:

• Buy AMZN20251219C235 (Dec 19 $235 call): This strike sits just above today’s price and has 45,148 OI. If Amazon holds above $228, this could be a low-cost way to ride a breakout.
• Buy AMZN20251219C260 (Dec 19 $260 call): Riskier, but the 60,999 OI suggests smart money sees a pop. Use this if you’re confident in AWS’s AI roadmap.

For the cautious:

• Buy AMZN20251219P225 (Dec 19 $225 put): With 25,598 OI, this is a hedge against a drop below the 200D MA ($214.85).

Stock traders: Consider entries near $221–$222 (200D support) with a target at $235–$240. If the price breaks above $229.67 (30D resistance), it could test the 30D MA at $234.30.

Volatility on the Horizon: Balancing Optimism and Caution

Amazon isn’t a straight-line trade. The technicals show a short-term bearish trend (MACD: -0.58, RSI: 43) but long-term range-bound potential. The options market, however, is pricing in a bullish breakout. This creates a tension: will the stock hold above $225, or will the $235–$240 calls become a self-fulfilling prophecy?

My take? The AI narrative and earnings revisions are strong enough to push AMZN higher, but don’t ignore the short-term bearish signals. Use the $225–$220 puts as a floor and the $235–$260 calls as a ceiling. If you’re in the stock, consider a risk-reversal strategy: buy the $235 call and sell the $225 put to offset costs.

Bottom line: This is a stock with momentum on both sides of the ledger. Play it smart—let the options data guide your entry, but keep a stop-loss near $221 to protect against a surprise drop.