DailyPlay – Opening Trade (AMZN) – October 31, 2024

AMZN Bullish Opening Trade Signal

Investment Rationale

Amazon.com, Inc. (AMZN) demonstrates robust earnings growth and profitability, underscoring its strength in e-commerce, with significant revenue and market share. The stock is trending upward, and while Amazon isn’t always central in AI discussions, AWS and its AI capabilities contribute substantially to profitability. Recently, Amazon announced it has been working behind the scenes on ‘Project Amelia,’ an AI tool for third-party sellers that optimizes decision-making, attracts sellers, and supports revenue growth, which should positively impact AMZN’s bottom line.

Amazon announces earnings after market close on Halloween, Thursday the 31st. We plan to explore a speculative trade around this event, hoping the conference call won’t spook the market but instead drives the stock higher based on its AI initiatives.

AMZN – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 6 AMZN Nov 1 $195/$205 Call Vertical Spreads @ $3.45 Debit per Contract.

Total Risk: This trade has a max risk of $2,070 (6 Contracts x $345) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $345 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher off recent support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 6/10

OptionsPlay Score: 97

Stop Loss: @ $1.73 (50% loss of premium)

View AMZN Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View AMZN Trade