AMZN Options Signal Bullish Bias at $240 Strike—Here’s How to Position for a Potential Breakout on Jan 2

• AMZN’s options market shows a 32% call/put open interest imbalance, with heavy call buying at the $235–$240 strikes.
• Technical indicators hint at a short-term bullish bias, but Bollinger Bands warn of volatility if support at $221.26 breaks.
• Institutional block trades suggest hedging at $230 puts and speculative bets on $250 calls ahead of the Jan 2 expiry.

Here’s the deal: AMZN is sitting at $231.29, down 0.53% today, but the options market is screaming bullish. Call open interest dominates at the $235, $240, and $237.50 strikes, while the put/call ratio (0.736) shows bears are on the back foot. Combine this with a Kline pattern suggesting a short-term rally and you’ve got a setup that’s hard to ignore. But let’s dig deeper—this isn’t just a one-way bet.

Bullish Calls Clot at $240, Block Trades Hint at Institutional Moves

The top OTM call options expiring this Friday ($235: 23,099 OI, $240: 20,673 OI) show heavy demand for a breakout above $232.60 (today’s high). Traders are pricing in a 6.8% move to $240, which lines up with the 30D support/resistance zone. Meanwhile, the AMZN20260116C250 call (500 contracts bought in a block trade) suggests big players are hedging for a post-holiday surge.

But don’t ignore the puts. The AMZN20260116P230 block trade (385 contracts) at $230 implies a floor below $231.29. If the stock dips below $222.45 (30D support), the lower Bollinger Band at $221.26 could trigger panic selling. The $215 put (8,244 OI) is a red flag—don’t be surprised if short-term traders pile in there if the AWS outage worries resurface.

News Flow: Bulls Have the Edge, But Risks Lurk in the Shadows

Amazon’s Q3 beat ($33B AWS revenue) and $35B India investment are fueling the call buying. Analysts are raising price targets to $315, and institutional investors just boosted their stake by 49%. But here’s the catch: insider selling (Jassy’s $19M worth of shares) and the Italy drone program shutdown hint at operational friction. The AWS outage on Dec 24 also reignited reliability concerns—keep an eye on customer attrition stories in the coming weeks.

Actionable Trades: Calls for the Breakout, Puts for the Safety Net

1. Bull Call Spread (Jan 2 expiry): Buy AMZN20260102C235 ($235 call) and sell AMZN20260102C240 ($240 call). If AMZN breaks $232.60, this spread targets a 15–20% return in 3 days.
2. Stock Entry: Consider buying AMZN near $222.45 if it holds. Target $235 as a first profit zone, with a stop-loss below $221.26.
3. Risk Reversal (Jan 9 expiry): Buy AMZN20260109C240 ($240 call) and sell AMZN20260109P230 ($230 put). This hedges a 6–8% move up or down, ideal for volatile January.

Volatility on the Horizon: Bullish Trends Ahead, But Stay Nimble

Amazon’s options and fundamentals are aligned for a short-term rally, but the $221.26 support level is a critical line in the sand. If it holds, the $235–$240 calls could be your golden ticket. But if the stock stumbles into the $220s, those puts at $215 and $230 will get busy. Either way, the next 72 hours—especially the Jan 2 expiry—could be a make-or-break moment for this trade. Keep your eyes on the AWS reliability reports and India investment updates; they’ll either fuel the fire or douse it.

Bottom line: This isn’t a binary bet. It’s a calculated play on a stock that’s dancing on the edge of a breakout. Position accordingly.