AMZN Options Signal Bullish Bias: Focus on $250 Call OI and $225 Put Contingency as Earnings Volatility Looms

• Amazon’s Q4 revenue hit $125B, beating estimates, while a $10B buyback and AI warehouse upgrades fuel optimism.
• Options data shows 64,372 open contracts at the $250 call (next Friday expiry), vs. 27,579 puts at $225—hinting at aggressive bullish positioning.
• A $720K block trade in the AMZN20260116C245 call suggests big players are betting on a short-term breakout above $245.
• New antitrust lawsuit adds downside risk, with puts at $200 showing extreme bearish hedging.

Here’s the thing: AMZN’s options market is screaming bullish right now, but the RSI at 82.9 and a looming lawsuit mean you can’t ignore the risks. The stock’s 1.27% drop today after a strong earnings report shows profit-taking is in play—but the underlying fundamentals and options flow still favor a rebound. Let’s break it down.

Bullish Call OI Dominance and the $250 Strike Show Confidence

The next Friday options chain is packed with call-heavy positioning. The $250 strike has 64,372 open contracts—the highest of any OTM call—while the $260 and $300 strikes trail with 40,891 and 34,178 OI respectively. This isn’t just retail hype; the AMZN20260116C245 block trade (2,000 contracts bought for $720K) suggests institutional players are eyeing a breakout above today’s intraday low of $242.25.

But don’t ignore the puts. The $225 strike has 27,579 open puts, and the $200 strike (yes, $200!) has 22,349. That’s not just fear—it’s a hedge against the antitrust lawsuit. If the stock gaps down, those deep puts could get activated. The key takeaway? The market is pricing in a strong rally but preparing for a sharp drop.

News Flow: Bullish Fundamentals vs. Regulatory Headwinds

Amazon’s recent headlines are a mixed bag. The $125B revenue beat and $10B buyback are textbook bullish catalysts. The AI warehouse robots and AWS AI tools also position Amazon for long-term margin expansion. But the new antitrust lawsuit—alleging anti-competitive practices—adds a wildcard.

Retail investors might be buying calls on the earnings optimism, but institutional traders are hedging with those deep puts. It’s a classic case of “buy the news, sell the news”—where the stock could whipsaw between $225 and $260 depending on which story dominates.

Actionable Trade Ideas: Calls for the Breakout, Puts for the Contingency

For options traders:

• Bullish Play: Buy the AMZN20260116C250 call (next Friday expiry). If AMZN breaks above $245, this strike has strong support from open interest and could see rapid gamma-driven acceleration.
• Bearish Hedge: A bear put spread using the $225 and $200 strikes (AMZN20260116P225 + AMZN20260116P200) would cap losses if the lawsuit triggers a gap down.

For stock traders:

• Entry: Consider buying AMZN near $242.25 (intraday low) if it holds above the 30D support at $232.28.
• Target: $250–$255 if the $250 call OI gets triggered.
• Stop-Loss: Below $232.28 would invalidate the short-term bullish trend.

Volatility on the Horizon: Balancing Bullish Momentum and Regulatory Risks

Amazon’s story is a tug-of-war between its dominant cloud and advertising growth and regulatory headwinds. The options market is pricing in a $250+ rally by next Friday, but the puts at $200 show no one’s taking this for granted. If you’re trading AMZN today, treat it like a high-stakes poker game: bet big on the call options if you believe in the $250 thesis, but keep a short-term put hedge in case the lawsuit story escalates. The key is to stay nimble—this stock isn’t going in a straight line, but the opportunities are there for those who can read the flow.