Amazon (AMZN) Options Signal Aggressive Bullish Play at $260 Strike – Here’s How to Position for Volatility

• AMZN surges 1.17% to $230.58, trading above 30D MA but below 200D MA
• Call open interest dominates at $260 strike (60,608 contracts), while puts cluster at $200 and $220
• Block trades show big money buying calls for 2026-01-16 expiry, signaling long-term conviction

Here’s the takeaway: AMZN’s options market is screaming bullish—but with a twist. While the stock trades in a long-term range, the call/put open interest ratio (0.71) and heavy positioning at $260+ strikes suggest investors are pricing in a sharp breakout. The key question: Will Amazon’s recent grocery expansion and India investment fuel this move, or will near-term volatility test support at $222.79?

Bullish Imbalance at $260 Strike: What the Options Are Telling Us

The options market isn’t just bullish—it’s aggressively bullish. For next Friday’s expiry (2025-12-19), the AMZN20251219C260 call has 60,608 open contracts—the highest of any strike. That’s not just noise: it’s a vote of confidence from institutional players who see a path to $260+ in the next two weeks. Compare that to the top puts at $200 (25,295 OI) and $220 (20,924 OI), and the imbalance is clear.

But don’t ignore the risks. The MACD (-0.72) and RSI (58) hint at a short-term bearish trend, and Bollinger Bands show the stock is trading near the middle band—meaning a breakout could go either way. The block trade at AMZN20260116C250 (500 contracts bought) reinforces the bullish narrative, but the $215–$222.79 support zone (200D MA) remains a critical line in the sand. If AMZN dips below that, the puts at $200 and $220 could ignite a short-term selloff.

News Flow: Fuel for the Bull Case

Amazon’s recent headlines are a goldmine for bulls. The $35 billion India investment and grocery delivery expansion aren’t just feel-good stories—they’re catalysts for long-term growth. Analysts at TD Cowen and JPMorgan are already calling AMZN the top mega-cap play for 2026, citing its AI/cloud momentum and balance sheet strength.

But here’s the catch: The market isn’t fully priced in yet. The stock’s 2.9% rally on Wednesday (post-announcement) was strong, but the 12-month price target of $295 implies a 29% upside. That’s a big ask for a stock trading near $230.58, which means the options market’s bullish bets at $260+ are ambitious—but not impossible if the India rollout accelerates.

Actionable Trade Ideas: Calls for Breakouts, Puts for Hedging

For options traders, the AMZN20251219C260 call is a high-conviction play. If AMZN breaks above its intraday high of $232.42, this strike could see explosive gains. For a safer bet, consider a call spread: buy the AMZN20251219C235 (45,462 OI) and sell the AMZN20251219C255 to cap risk.

On the stock side, here’s a concrete setup:

• Entry: Buy AMZN near $228.94 (30D support) if it holds above $222.79 (200D support).
• Target: Aim for $235 (30D MA) as a first target, with $242.50 (Bollinger Upper Band) as a stretch.
• Stop: Exit if AMZN closes below $222.79—this would validate the bearish MACD and RSI signals.

For hedgers, the AMZN20251219P220 put (20,924 OI) offers downside protection if the stock stumbles. A bear put spread using AMZN20251219P220 and AMZN20251219P200 could limit losses while keeping costs low.

Volatility on the Horizon: What to Watch

The next 72 hours will be critical. If AMZN holds above $228.94 and the RSI crosses 60, the bulls will have momentum. But a breakdown below $222.79 could trigger a short-term selloff, especially with puts at $200 and $220 primed to act. The block trade at AMZN20260116C250 also hints at long-term positioning—so don’t be surprised if the stock sees a bounce by early 2026.

Bottom line: AMZN is at a crossroads. The options market is pricing in a breakout, but technicals and support levels suggest caution. For traders, the sweet spot is a bullish call at $235–$260 strikes, paired with a tight stop below $222.79. This isn’t a guaranteed win—but it’s a calculated bet on a stock with massive growth potential.