Capitalizing on Secured Short Puts in Amazon (AMZN) for Income and Strategic Buy-Ins

In the ever-evolving landscape of options trading, secured short puts offer a compelling strategy for income generation and strategic buy-ins, particularly for stocks with strong fundamentals and bullish analyst consensus. Amazon (AMZN), a titan of the tech sector, presents a unique opportunity for this approach. By leveraging out-of-the-money (OTM) put options, investors can collect premiums while aligning with the company's robust financial trajectory and optimistic price forecasts.

The AMZN OTM Put Option: Yield and Probability

As of November 26, 2025, AMZN's stock price closed at $229.16. A relevant OTM put option for November 7, 2025, expiration is the $210.00 strike price, with a bid of $5.90. This represents a 4% discount to the current price. The probability of this put expiring worthless is estimated at 68%, translating to a 2.81% return on the cash commitment or 23.83% annualized. For investors willing to accept the risk of AMZN falling below $210, the reward is a high-probability income stream.

Risk Parameters and Volatility Considerations

While the 68% probability of success is favorable, the strategy is not without risk. Implied volatility for AMZN options stands at 36%, reflecting heightened market uncertainty. This volatility could drive the stock lower, potentially obligating the investor to purchase shares at $210 if the price drops below the strike. However, AMZN's fundamentals and analyst price targets suggest this scenario is unlikely.

Fundamental Alignment: Free Cash Flow and Analyst Targets

Amazon's free cash flow (FCF) is a cornerstone of its financial strength. As of 2025, AMZN's FCF is $40.04 billion, with projections to surge to $141.87 billion by 2029. This growth is fueled by Amazon Web Services (AWS), which reported $33 billion in Q3 2025 revenue and a 34.5% operating margin. Analysts have also set a bullish tone, with a 12-month average price target of $295.78 and individual targets ranging from $250 to $360. These fundamentals suggest AMZN is well-positioned to outperform the $210 strike, making the short put strategy both income-generating and aligned with long-term value.

Strategic Buy-Ins and Bullish Catalysts

For investors, the secured short put offers a dual benefit: income if the stock stays above $210 and a potential entry point at a 4% discount. Amazon's aggressive investments in AI infrastructure and logistics-such as a $50 billion expansion for U.S. government cloud infrastructure and a $3 billion Mississippi AI data hub-further reinforce its growth narrative. These initiatives, coupled with AWS's dominance, create a strong case for the stock to trend upward, reducing the likelihood of a significant pullback.

Tactical Considerations and Alternatives

While short puts are effective, they must be weighed against alternatives like bull call spreads or covered calls. However, the secured short put's high probability of success and alignment with AMZN's fundamentals make it particularly attractive. For risk-averse investors, a bull call spread could mitigate downside while still capitalizing on the bullish outlook.

Conclusion

Secured short puts on AMZN offer a tactical approach to income generation and strategic buy-ins, supported by the company's robust FCF, AWS growth, and analyst optimism. While volatility introduces risk, the fundamentals suggest AMZN is unlikely to breach the $210 strike. For disciplined investors, this strategy provides a high-probability opportunity to enhance returns while positioning for long-term value.