Lots of money is going into low P/E stocks like AMAG, VZ, and T. AMAG will likely triple this year because their P/E=5 and they have a very solid balance sheet.
I think the 200 institutions that own 80% of the stock have already started to exit. The weekly calls no longer command such high premiums so selling covered calls is not as profitable as it was last year.
Since I started recording on 6/1/15 this one week drop of $83.73 is by far the largest. The second largest was four weeks ago $70.68. The day is young and there may be many more that don't want to hold over the weekend. We could easily drop below $500.
$15 for worthless 630 July calls doesn't sound cheap to me. You must be very rich but that is about to change unless you recognize the market has changed direction.
Lots of that cash is going into companies that make good profit like AMAG, GILD, T, and VZ. The P/E IS again important and AMZN just doesn't have it.
Ignore her good advice and go broke. I hope she ignores your advice.
That is a week and a half away and AMAG is going up in a down market. AMZN has gone down 20% ($130) already this year and I think those that have sold have sought out low P/E stocks like AMAG. A wise decision in my view.
85% of all options expire worthless. Of course you can recover some of your cost by selling weekly options but right now next weeks 630 call options are going for a dime. $10 doesn't make much of a dent in the $1800 you pay for the July option and there are only 24 weeks to go. Only way you can make out is if AMZN turns back up and the whole market is in a down trend. Grossly overpriced stocks like AMZN will go down even faster. You will do better buying AMAG $25 calls. AMAG has a P/E=5 and is likely to triple in price this year.
Five down days don't make a trend but they make me doubt that we will see $630 again this year. You can have my 620 calls for a penny because tomorrow they will be worthless.
We have already burst through the 20 EMA and next resistance is at $26.40. If we drive through that the 50 EMA is only 60 cents higher and lots of computers are programmed to watch for stocks moving above the 50 EMA. I think we are getting close to a major up move as wise investors leave the falling stars like AMZN and move to low P/E stocks like AMAG.
That was resistance for two months last year, August and September. Hopefully it will be support for that long but I wouldn't count on it.
Just think how much you could make shorting from here to under $300. But, if you do, buy leap calls to allow you to buy back for less than you shorted.
I warned you. Now if you want to keep holding I suggest you buy leap puts for insurance. There is still a lot of hot air in this balloon.
Does that mean that Amazon is finally going to make a profit with higher prices?