Bullish Option Strategies Are Betting That Big Tech Stocks Will Grind Higher

Some options investors are betting big tech’s prices to grind higher rather than wild swings ahead of their earnings this week.

On Friday, a buyer made a bet on Amazon's stock price by purchasing 2,300 September $135 calls wh ile selling roughly 4,600 September calls with a strike price of $150, paying a net premium of about $460,000.

The buyer is betting that the shares might rise from their current level around $130 but not exceed $150 by too much. If the stock price goes above $150, the potential profit from this bet will decrease and could eventually result in a loss.

Analysts have noticed similar trades in other big tech names last week, including Microsoft, which saw a set of September call options with a premium change of $222,000.

Even though the Nasdaq 100’s rally of over 40% this year has slowed down a bit last week, the call spreads might indicate that some traders still believe there’s some potential growth.

“Many investors expect heightened single-stock moves around the Nasdaq 100 index’s rebalance, which will reduce the weight of some of its biggest companies in the index,” said Mark Sebastian, founder of Option Pit LLC. “One-month implied volatility on companies like $Amazon.com(AMZN)$ , $Meta Platforms, Inc.(META)$ ., and $Alphabet(GOOGL)$ approached two-month highs.”

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