Options players on Wednesday set their sights on Amazon.com, Inc. (AMZN) and MGM Resorts International (MGM). Online retail giant AMZN was targeted by put players, despite its recent string of record highs, while heavily shorted MGM attracted the attention of call buyers.
Traders gravitated toward puts on AMZN yesterday, according to data from the International Securities Exchange (ISE). During the course of the session, speculators on the ISE bought to open 2,878 puts on AMZN, along with just 1,162 calls. The stock’s single-day ISE put/call volume ratio of 2.15 highlights a strong preference for bearish bets over bullish.
In fact, this seems to be a growing trend for the retail titan. AMZN’s 10-day ISE put/call volume ratio of 1.04 rests in the 64th annual percentile, suggesting that traders have purchased puts over calls at a somewhat accelerated pace during the past couple of weeks.
In the same skeptical vein, AMZN sports a lofty Schaeffer’s put/call open interest ratio (SOIR) of 1.45, with puts easily outnumbering calls among options slated to expire within three months. This ratio rests in the 93rd percentile of its annual range, as short-term speculators have been more pessimistically aligned just 7% of the time during the previous year.
Put players on Wednesday focused their efforts on AMZN’s 170-strike puts. The equity’s January 2011 170 put added 2,128 contracts to open interest overnight, while the February 170 put added 1,905 new contracts. With AMZN lingering near $183, these puts are out of the money by a substantial margin.
Elsewhere on Wall Street, short sellers have been hitting the exits. Short interest on AMZN deflated by 22.7% during the past month, and now accounts for a relatively modest 2.4% of the stock’s float.
These bears have no doubt been forced out of their pessimistic positions by AMZN’s positive price action. The stock has racked up a gain of more than 36% in 2010, with AMZN catching a lift from support at its rising 10-day, 20-day, and 50-day moving averages. As the shares extend their quest for new highs, a continued capitulation by the skeptics could translate to additional gains.