Mike Khouw's Amazon (AMZN) Trade

On CNBC's Options Action, Mike Khouw talked about an options strategy in Amazon.com, Inc. AMZN. He said that Best Buy Co., Inc. 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.