Amazon (AMZN) Options Signal Bullish Bias: Key Strikes at $240 and $250 Offer Strategic Entry Points Amid AI and Retail Dynamics

• AMZN trades at $238.84, up 0.93% today, with volume surging to 22.1 million shares.
• Options market favors calls: Put/Call Open Interest ratio at 0.74, with heavy call OI at $240, $250, and $260.
• Block trades highlight risk: A 590-lot put buy at $240 (expiring Jan 30) signals hedging activity ahead of key strikes.

The options market and technicals are sending a clear message: Amazon has upside potential in the near term, but traders must watch for volatility around the $240–$250 range. Let’s break down why this matters for your strategy today.

Bullish Sentiment Locked in $240–$250 Range, But Hedgers Stay Cautious

The options chain tells a story of cautious optimism. For Friday’s expiration (Jan 16), calls at $240 ($OI: 59,095) and $250 ($OI: 55,838) dominate, while puts at $225 ($OI: 27,751) and $230 ($OI: 25,811) show defensive positioning. This imbalance suggests traders expect a push above $240 but are hedging against a pullback to $225–$230.

The most eye-catching move? A block trade of 590 puts at $240 (AMZN20260130P240) with a $362,850 turnover. This isn’t just noise—it’s a whale hedging a large position ahead of the Jan 30 expiry. Think of it like a captain securing the ship before a storm: they’re bracing for a potential test of $240 as support.

News Flow: Saks Drama Adds Noise, But AI Optimism Drives Calls

Amazon’s legal battle with Saks over a "worthless" $475M investment is creating short-term headline risk. But analysts like Raymond James are still bullish on the core business. The firm cut its price target to $260 but kept an "Outperform" rating, citing AWS growth and AI initiatives like Trainium and Nova.

Here’s the twist: while the Saks saga could drag sentiment, the $260 price target from Raymond James aligns with the heavy call interest at $250. If AWS delivers strong Q4 results (beatable estimates, per analysts), this could fuel a breakout above $240. Retailers and investors are betting Amazon’s luxury e-commerce push via "Saks at Amazon" might offset some of these risks.

Actionable Trade Ideas: Calls at $240 and $250, With a Safety Net

For options traders:

• Buy AMZN20260123C240 (Jan 23 expiry): With $8,353 open interest, this call is positioned to capitalize if AMZN holds above $240. Target a close above $245 to trigger momentum.
• Buy AMZN20260123C250 (Jan 23 expiry): For higher conviction, this $55,838-heavy strike offers leverage if AI-driven optimism pushes AMZN toward $260.
• Hedge with AMZN20260123P230 (Jan 23 expiry): If you’re long AMZN or calls, this put ($3,917 OI) acts as insurance against a drop to $225–$230.

For stock traders:

• Entry near $238.50 if AMZN holds above the 30D support at $232.24.
• Target $245–$250 if the 200D MA ($218.75) and Bollinger Bands (upper at $249.73) align with a breakout.
• Stop-loss below $232.24 to avoid a retest of the 200D support.

Volatility on the Horizon: Balancing AI Hype and Retail Headwinds

Amazon sits at a crossroads. The options market is pricing in a 9.87% upside to $260, but the Saks dispute and Agentic Commerce risks could create whipsaw moves. If you’re trading AMZN today, focus on liquidity-rich strikes like $240 and $250—these are where the smart money is moving.

Bottom line: This is a stock with direction, but patience is key. Let the $240 level act as your filter—break above it, and the path to $250 becomes clearer. If it falters, the puts at $230 and $225 will light up. Either way, the next 72 hours could define AMZN’s short-term trajectory.

P.S. Keep an eye on AWS earnings. A beat could turn this $240 call into a $250 sprint.