Amazon (AMZN) Options Signal Key Bullish Setup at $240–$260: Here’s How to Position for the Upcoming Volatility

• Options market shows heavy call open interest at $260 and $300 strikes, while puts at $220 dominate bearish sentiment.
• Put/call ratio of 0.7076 (calls > puts) suggests near-term bullish bias, but Bollinger Bands hint at potential reversion to the mean.
• Block trades reveal a $240 put and $250 call battle ahead, with real estate and AI news fueling mixed signals.

Here’s the core insight: AMZN’s options activity and technicals point to a high-probability breakout scenario. The stock is trading in a tight range near its 200D MA ($215.24) but faces immediate resistance at $228.94 (30D support level). With calls at $260 ($OI: 60,216) and $300 ($OI: 51,398) dominating this Friday’s chain, the market is pricing in a sharp upside move—if it breaks through the $229.67 ceiling. But don’t ignore the $220 put ($OI: 23,549) as a key downside guardrail.

"The Options Playbook: Calls at $260, Puts at $220, and the $240 Block Trade"

The OTM call distribution tells a story of optimism. Calls at $260 and $300 have combined OI of 112,614, dwarfing the top put OI at $220 (23,549). This imbalance suggests institutional players are hedging for a big pop—possibly from the AI-driven lending partnership or logistics demand. But the block trade at AMZN20251121P240 (830 contracts, $1.35M turnover) adds a wrinkle. It’s a bearish signal, hinting someone is locking in protection just below the current price.

Meanwhile, the AMZN20260116C250 call (500 contracts, $480K turnover) shows long-term bullish conviction. If the stock breaks $240, this strike could become a magnet for momentum traders. The risk? A breakdown below $218.34 (lower Bollinger Band) would validate the $220 put-heavy sentiment.

"News vs. Numbers: Can Amazon’s Real Estate Wins Offset Technical Weakness?"

The recent $220M LAX distribution center sale and AI lending partnership are bullish for long-term fundamentals. But here’s the catch: the stock’s 30D MA ($233.80) is a massive overhang. If the price can’t close above $229.67 (30D resistance), those headlines might fade fast. Retail investors might overreact to the real estate news, but the technicals say "wait for a confirmed breakout."

The HUMAN AI verification story is noise for now—until AWS infrastructure growth directly impacts AMZN’s revenue. Until then, focus on the $220–$260 price war unfolding in options.

"Actionable Trades: Calls, Puts, and Precision Entries"

For options traders:

• Buy AMZN20251219C240 (this Friday’s $240 call, OI: 42,497). If AMZN closes above $229.67 by Friday, this strike could explode as a leveraged play.
• Sell AMZN20251226P220 (next Friday’s $220 put, OI: 4,879). The $220 level is heavily shorted—use it as a premium harvest if the stock holds above $218.34.

For stock traders:

• Entry near $221.06 (200D MA support). If AMZN tests this level and bounces, target $229.67 as a first profit zone.
• Aggressive longs can chase a breakout above $229.67, with $235 (middle Bollinger Band) as a critical next target.

Volatility on the Horizon: Balancing Bullish and Bearish Catalysts

The next 72 hours will be pivotal. A close above $229.67 would validate the call-heavy sentiment and trigger a retest of the 30D MA. But a drop below $218.34 would shift the narrative—those $220 puts would become a self-fulfilling prophecy. Either way, the options market has already priced in a binary outcome: $240 as the bullish threshold, $220 as the bearish floor.

Your job? Position with precision. If you’re bullish, load up on the $240 call. If you’re cautious, short the $220 put. And keep an eye on that $221.06 support—it’s the last line of defense before the bears take control.