Amazon (AMZN) Options Signal $260 Bull Play Amid AI Expansion – Here’s How to Position for Volatility

• AMZN trades at $229.81, down 0.85% on heavy volume (16.6M shares), with Bollinger Bands suggesting a potential rebound near $217.41 support.
• Call open interest dominates at $260 and $300 strikes (next Friday expiry), while puts pile up at $200 and $220, signaling a bullish bias.
• Block trades hint at big money positioning: A 830-lot put at $240 (expiring Nov 21) and a 500-lot call at $250 (Jan 16) suggest mixed hedging and aggressive bets.

The Options Market Is Betting on a $260+ Rally – Here’s Why

Let’s start with the elephant in the room: The next Friday options chain is loaded with call open interest at stratospheric strikes. The $260 call (AMZN20251219C260) has 60,388 open contracts, and the $300 call (AMZN20251219C300) isn’t far behind at 51,006. That’s not just bullish—it’s aggressively bullish. Meanwhile, puts at $200 (AMZN20251219P200) and $220 (AMZN20251219P220) have 25,238 and 20,555 open contracts, respectively. The 0.70 put/call ratio for open interest confirms the market’s bias: investors are pricing in a sharp rebound, not a crash.

What’s Driving This Setup?

The block trades tell a story. A massive 830-lot put at $240 (AMZN20251121P240) suggests someone’s hedging a short-term position. But the 500-lot call at $250 (AMZN20260116C250) expiring in January 2026? That’s a long-term bet on AWS’s AI push. Combine this with Amazon’s recent $50B AI data center investment via Anthropic and AWS’s Graviton5 rollout, and it’s clear: big players are positioning for a tech-driven rebound.

News Flow: AI and Logistics Fuel the Bull Case

Amazon’s recent headlines are a mixed bag but lean positive. The $52B India expansion and AWS’s AI infrastructure upgrades are tailwinds for growth. Same-Day grocery delivery expansion is squeezing rivals like Walmart, and the Prime Video ad tier hitting 315M viewers adds recurring revenue. Yes, the Italian tax settlement and 30,000 job cuts are negatives, but the AI and cloud momentum seems to outweigh those for now. Retail investors are likely interpreting this as a "buy the dip" scenario, hence the call-heavy options flow.

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

If you’re bullish, the AMZN20251219C235 call (49,015 OI) is a sweet spot. With the stock trading near $229.81, a break above $235 could trigger a rally toward $260. For a safer play, consider a bullish call spread: buy the AMZN20251219C235 and sell the AMZN20251219C260. If the stock gaps up on earnings or AI news, you’ll capture the move without unlimited risk.

For the stock itself, watch the 30D support/resistance zone ($228.94–$229.67). A close above $232.11 (today’s high) would validate the short-term bullish trend. Consider entry near $229.80 with a target at $235 and a stop at $228.69 (today’s low). If the stock breaks $235, re-target $240 as the next level.

Volatility on the Horizon: Balancing Risk and Reward

Amazon’s options market is a chessboard of conflicting signals. The heavy call OI at $260 implies a 15%+ move from current levels—a big ask, but not impossible with AWS’s AI bets. The puts at $200 and $220 act as a safety net, though. My takeaway? This is a stock primed for a breakout, but don’t ignore the risks. If the 200D moving average ($215.02) breaks, the puts could dominate. For now, the AI narrative and options flow suggest a short-term rally is in play—just keep your stops tight.