Amazon (AMZN) Options Signal Bullish Bias: Key Call Activity at $250 and Put Skew at $225 Point to Strategic Entry Zones for Traders

• AMZN trades at $237.25, down 2.2% from its 52-week high of $242.60, but MACD (4.05) and RSI (69.3) suggest momentum remains intact.
• Call open interest spikes at $250 strike (62,258 contracts) for Friday’s expiry, while puts peak at $225 (27,689), signaling a tug-of-war between bullish conviction and defensive positioning.
• A $1.34M block trade in the AMZN20260116P220 put (expiring Friday) hints at institutional hedging ahead of key earnings catalysts.

The options market is sending a clear message: traders are pricing in a bullish bias for AMZN, but with a healthy dose of caution. The stock’s 2.2% drop today hasn’t shaken long-term optimism—MACD and RSI remain in positive territory, and Bollinger Bands show price is trading near the middle band, suggesting consolidation before a breakout. But the put/call ratio of 0.75 (calls dominate) means we can’t ignore the risk of a pullback.Bullish Calls at $250 vs. Defensive Puts at $225: A Battle for AMZN’s Narrative

The options chain tells a story of optimism. For Friday’s expiry, the $250 call (OI: 62,258) and $240 call (OI: 60,169) dominate, reflecting bets on a rebound above current levels. These strikes align with recent resistance zones (30D support/resistance at $232.76), suggesting traders expect a test of $250 as a catalyst for a broader rally. Conversely, the $225 put (OI: 27,689) and $230 put (OI: 27,307) show hedgers are bracing for a drop toward the 200D support at $221.06. The AMZN20260116P220 block trade—buying 2,000 puts at $220—adds weight to the bearish case, as it could signal a hedge against a post-earnings selloff or regulatory risks (e.g., the EU fine).

News Flow: Growth Drivers vs. Regulatory Headwinds

Amazon’s recent headlines are a mixed bag. Record $125B revenue, AI warehouse robots, and a $2.5B cloud security acquisition all fuel bullish sentiment. But the $1.2B EU fine and a class-action lawsuit over data privacy introduce near-term uncertainty. Retail investors might be buying calls to capitalize on AWS’s 22% YoY growth, while institutional players are hedging with puts to protect against regulatory volatility. The key question: Will the market prioritize Amazon’s AI-driven growth narrative or overreact to legal risks? History suggests the former—AMZN’s 10% stock buyback program and $500M investment in renewables show management is focused on long-term value.

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

• Short-Term Call Play: Buy the AMZN20260116C240 (strike $240, expiry Friday). With OI at 60,169, this strike offers a balance of liquidity and leverage. If AMZN rebounds above $237.25 (current price), the $240 call could see a pop as the stock tests its 30D resistance at $232.76.
• Longer-Term Call Play: The AMZN20260123C250 (strike $250, expiry next Friday) is a high-conviction bet. If the stock breaks above $241.2 (today’s high), this strike could act as a catalyst for a push toward $250, especially with AWS’s AI growth story in play.
• Stock Entry Strategy: Consider buying AMZN near $232.23 (30D support) if the price holds. A break above $241.2 would validate the bullish case, with a target at $245 (Bollinger Upper Band at $249.78). Stop-loss below $236.22 (intraday low) would protect against a breakdown.
• Hedge with Puts: The AMZN20260116P225 (OI: 27,689) offers downside protection. If the EU fine or lawsuit news escalates, this put could gain value as volatility spikes.

Volatility on the Horizon: Balancing Bullish Momentum with Prudent Risk Management

Amazon’s options market is a microcosm of its broader story: a juggernaut of innovation facing regulatory friction. The $250 call frenzy and $220 put block trade suggest traders are preparing for both a rally and a selloff. For those willing to take a stance, the $240 and $250 calls offer high-reward opportunities if AMZN’s AI and cloud growth outpaces legal risks. But don’t ignore the puts—$225 and $220 strikes could become lifelines if the EU fine triggers a broader tech selloff. In the end, AMZN’s path hinges on one question: Can Amazon’s innovation engine outpace its legal headaches? For now, the options market says yes—but the next few days will tell.