AMZN Options Signal $260 Call Frenzy: Here's How to Play the AI-Driven Bull Case

• AMZN trades at $227.38, down 0.94% from $229.53 after hitting a 52-week high of $230.82
• Options market shows 0.71 put/call ratio imbalance with 61,344 open interest at the $260 call (next Friday expiry)
• Block trades reveal $480k buy of 500 AMZN20260116C250 calls as AI partnerships gain traction

The market is whispering 'AI breakout' through AMZN options. While the stock dips slightly today, the options chain tells a different story: massive call buying at $260 and $270 strikes suggests big money is positioning for a 2026 rally. Combine this with Amazon's recent AI partnerships and AWS growth, and the case for a bullish trade setup is compelling.The $260 Call Frenzy and Whale Moves

The options market is polarized. For next Friday's expiry, the $260 call (AMZN20251219C260) leads with 61,344 open interest—nearly double the nearest competitor. This isn't just retail noise: a $480k block trade of 500 AMZN20260116C250 calls (expiring Jan 16) shows institutional conviction. Meanwhile, puts at $200 (AMZN20251219P200) with 25,591 open interest hint at downside protection concerns.

This call-heavy positioning suggests two things: 1) traders expect a sharp rebound above $230 to unlock the $260 call's value, and 2) the $214.87 Bollinger Band support level is seen as a critical floor. The risk? If AMZN closes below $220 by Friday, the $225 put (AMZN20251212P225) with 14,311 open interest could trigger a short-term selloff.

AI News Fueling the Bull Case

Amazon's recent AI announcements are more than buzz. The Saks collaboration using AWS's NLX Voice+ and the OpenAI model integration on Bedrock show AWS's AI infrastructure is gaining real-world traction. With Q3 AWS revenue hitting $33B and Rufus AI driving a 75% spike in purchase sessions, the fundamentals align with the options frenzy.

But don't ignore the cracks. The CEO's $19M in insider sales and Marvell's chip transition concerns (Trainium3 to Alchip) add complexity. However, institutional buying (Pinnacle's 11.1% stake increase) and BofA's $272 price target suggest these risks are being priced in.

Actionable Trade SetupsFor Options Traders:

• Bullish Play: Buy AMZN20251219C260 (next Friday expiry) if AMZN breaks above $230. Target $260 for 15%+ gains if AWS AI adoption accelerates.
• Bearish Hedge: Buy AMZN20251219P225 to protect against a drop below $220. This put has 14,311 open interest and aligns with the 200D support zone.

For Stock Investors:

• Long Entry: Consider buying AMZN near $228.50 (midway between 30D support at $228.94 and today's low of $227.21). Target $240 if the $232.5 call (AMZN20251219C2325) sees buying pressure.
• Short-Term Exit: Take profits near $232.50 if the 30D moving average ($234.21) holds. This avoids the 200D MA ($214.80) trap zone.

Volatility on the Horizon

The next 72 hours will test AMZN's resolve. A close above $232.50 could trigger a rally toward $250, validating the $260 call frenzy. But a drop below $220 would force a reevaluation of the $214.80 Bollinger Band support. Either way, the options market has priced in a 2026 AI-driven rebound—now it's about timing the entry. With AWS's re:Invent conference momentum and fee cuts in Europe, the long-term bull case remains intact, but short-term volatility is inevitable.