$AMZN Options Intelligence

🎯 BUY AMZN DEC 19 235/245 BULL CALL SPREAD

I recommend this bull call spread because the term structure shows the 30-day Clean IV (around 30.4%) is slightly below the 32.9% baseline volatility, indicating options are somewhat underpriced and favoring a premium buy strategy. Amazon’s current price is $235.64, trading near strong technical support with multiple moving averages signaling a buy, including the 20-day MA at 236.47 and the 50-day MA at 228.69. Analyst consensus is strongly bullish with a 12-month average price target near $296, reflecting substantial upside potential. Institutional buying activity and positive holiday season revenue forecasts further support a bullish stance. The expected daily move is ±$5.84, so the 235/245 spread captures upside beyond the current price with defined risk[1][2][7].

Buy AMZN Dec 19 235/245 Bull Call Spread
Stock Price: $235.64 | Entry: Approx. $3.00 debit (Buy 235 Call ~ $6.50 ask, Sell 245 Call ~ $3.50 bid)

📊 Trade Metrics

• Risk: $300 (max loss = debit paid)
• Max Profit: $700 (difference between strikes $10 minus debit $3)
• Breakeven: $238 (strike 235 + $3 debit)
• Win Rate: Moderate (delta of 235 call ~0.5, 245 call ~0.25 net delta ~0.25)
• Days to Expiration: 32 (Dec 19)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Volatility: 32.9%
• 30-day Clean IV: ~30.4% (under baseline = buy premium)
• IV Rank: 100% (high overall, but near-term IV lower than baseline)
• Earnings Multiplier: Moderate (earnings in 80 days, Dec 19 well before earnings, so no earnings premium)
• Calendar Opportunity: Dec 19 options slightly underpriced vs baseline, good for directional buys

📈 Greeks & Volatility

• Net Delta: ~+0.25 (bullish exposure)
• Theta: Mildly negative (~ -0.05 per day)
• Vega: Positive (benefits from IV rise)
• Current IV: 39.3% (market IV), clean IV lower after adjusting for skew

🎯 Why This Trade

The term structure indicates Dec 19 options are attractively priced relative to historical volatility, favoring buying premium strategies. Amazon is technically supported above the 20-day and 50-day moving averages and has strong analyst buy consensus with a $296 target, implying ~25% upside over the next year. Institutional buying reported today and strong holiday sales forecasts add bullish fundamental catalysts. The bull call spread limits risk to $300 while allowing participation in a potential rally beyond $245, which is a reasonable near-term target given the current technical and fundamental backdrop. The spread also benefits from the current IV environment where near-term IV is not overly expensive compared to baseline, reducing premium decay risk.

📊 Pro Analysis

• Institutional buying by FSM Wealth Advisors LLC and Sharper & Granite LLC supports bullish sentiment today
• Technical indicators: RSI neutral (50.58), MACD bearish but price above 50-day and 200-day MAs (bullish trend)
• Analyst consensus: 102 buy ratings, average price target $296 (strong buy)
• Expected daily move ±5.84 supports strike selection at 235/245 range

🔍 Earnings Date Check

• Next earnings: Feb 5, 2026 (80 days away)
• Dec 19 expiration is well before earnings → no earnings volatility priced in, reducing event risk

💡 Trade Management

• Entry: Place limit order around $3.00 debit (midpoint of bid/ask)
• Target: Close at $5.00+ (50-70% profit)
• Stop: Exit if AMZN falls below 230 (technical support breach)
• Time Stop: Close 2-3 days before expiration if not profitable

📅 Economic Events

• Fed Rate Decision Dec 10 (23 days before expiration) may add volatility risk

🔒 Pricing Validation

• 235 Call intrinsic value: $0.64 (stock 235.64 - strike 235)
• 245 Call intrinsic value: $0 (OTM)
• Debit spread intrinsic value: $0.64 max (235 call ITM)
• Spread cost ~$3.00 > intrinsic $0.64, valid debit spread
• Put-call parity and bid-ask spreads consistent

🔍 Market Overview

The market currently favors growth stocks like AMZN with strong institutional buying and positive holiday sales outlook. The stock is supported technically above key moving averages, and the RSI near neutral suggests room to run. The broader tech sector is stable, and Amazon’s diversified business model including AWS and advertising provides fundamental strength. The Fed’s recent rate cuts and stable 10-year yield near 4.12% support a constructive environment for equities. The Dec 19 expiration avoids earnings event risk and is positioned ahead of key economic events, allowing for directional exposure with defined risk.

---

Confidence Level: Moderate-High
The trade balances defined risk with upside potential supported by technical, fundamental, and institutional factors. The clean IV below baseline supports buying premium, while the bull call spread limits downside risk. The main risk is a short-term pullback or macro volatility spike near Fed decision.

Risk Assessment:
• Max loss limited to $300 per spread contract
• Moderate delta exposure (~0.25) reduces sensitivity to small moves
• Time decay is manageable given 32 days to expiration
• No earnings event risk before expiry

This trade is suitable for a moderately bullish view on AMZN over the next month with a controlled risk profile.