On
CNBC's Options Action, Mike Khouw talked about an options strategy in Amazon.com, Inc. (NASDAQ:
AMZN). He said that Best Buy Co., Inc. (NYSE:
BBY) slipped after posting disappointing earnings, and added that he is worried about Amazon (
AMZN) too.
Mike Khouw explained that Amazon (
AMZN) is trading at a high P/E multiple, and he thinks that it will eventually come down. He wants to make a bearish bet with a calendar spread. Mike Khouw wants to buy the April 165 put for $10.20, and sell the January 165 put for $3.60. This trade would cost him $6.60, and it will be the most profitable if AMZN trades at $165 in January, and below $165 after that.
Amazon (
AMZN) gained 0.94%, and closed at $175.57 today.
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