Sell Puts On AMZN After Steller Q3 Beat, While Benefit From Long-Term Upside

After Amazon Q3 earnings result exceeded expectations, the main contributors came from strong growth in its cloud-computing unit (AWS), and AWS gained more than 13% after the earnings release. As an investors with Amazon for the long-term, I would like to share why I think selling puts for $Amazon.com(AMZN)$ now might be a good choice.

In this article, I would like to share a structured plan for selling cash-secured puts on Amazon (AMZN) after its strong Q3 beat — while still benefiting from long-term upside exposure.

Why Selling Puts on Amazon Makes Sense Now

1) Post-earnings strength removes uncertainty

Earnings risk is gone for this quarter. The market rewarded:

• Strong AWS acceleration

• Expanding margins (especially advertising + cloud)

• Stabilized e-commerce logistics efficiency

• Rising free cash flow

Momentum + cleaner forward outlook = higher probability of staying elevated or grinding higher.

2) Premiums still elevated

Even after volatility cool-off post-earnings, AMZN still carries a healthy implied volatility term-structure due to:

• Macro uncertainty (Fed path, AI capex cycle)

• Tech momentum rotation

• Seasonal holiday-quarter catalyst

This means rich premium for put sellers without needing ultra-aggressive strikes.

3) Bullish long-term trajectory

As a long-term investor, selling puts is a way to:

• ✅ Get paid to wait for dips

• ✅ Acquire more shares at discounts

• ✅ Generate income from core holding

You win if:

• AMZN goes up

• AMZN goes sideways

• AMZN dips slightly (you buy cheaper shares)

Strategy: Cash-Secured Put Selling (1–3 month window)

Target mindset

You want the stock long-term, so assigned shares = win.

Current structure idea (example framework)

(Use whatever strikes align with your margin and capital)

Example hypothetical trade

Spot AMZN assumption: ~$185

• Trade structure: Sell $170 put for 45 days

• Premium (illustrative): ~$3.25 ($325)

• Yield on cash secured: ≈ 1.9% for 45 days (~15.5% annualized)

• Outcome if above $170: Keep premium (~15% APY)

• Outcome if below $170: Assigned at ~8% discount to spot

Position sizing & discipline

✅ Tips

• Only sell strikes where you'd love to own more shares

• Stay cash-secured (avoid naked leverage)

• Roll down/out when premium decays 50–70%

• Sell into dips & rising IV spikes for best yields

❌ Avoid

• Weekly zero-DTE gambling

• Selling puts during macro shock spikes without cash buffer

• Selling too bullish when RSI > 75 (momentum exhaustion)

Why it fits AMZN specifically

Think of AMZN like MSFT or AAPL before — options allow harvesting premium during multi-year compounding.

Complementary long-term strategy

Long AMZN shares

• Sell cash-secured puts for income

• Occasionally sell covered calls at stretched valuations (not too aggressively to preserve upside)

This builds a synthetic dividend machine on a company still compounding.

Final Investor Mindset

You are not forced to time tops/bottoms. Instead, you turn time → income and dips → opportunity.

Put selling on AMZN = bullish patience + cash flow + discounted accumulation.

In the next section, we will look at the rolling 12-month AMZN put-selling plan to pair with the payoff diagram.

12-Month Rolling Put Selling Schedule (Cash-Secured)

Assumption: You want to steadily accumulate AMZN or collect premium while staying cash-secured.

Key Execution Rules

Target Strike Logic

• Conservative income: 8–12% OTM

• Balanced approach: 5–8% OTM

• Aggressive accumulation: ATM to 5% OTM

AMZN-specific catalysts to ride

• AWS re-acceleration cycle

• AI service monetization through AWS

• Advertising growth (2nd biggest revenue driver soon)

• Logistics scale moat

• Optionality: Prime, healthcare, robotics, autonomous delivery

This means AMZN dips = opportunity — ideal for cash-secured puts.

Risk Controls

Our Strategy Objective

Generate yield + accumulate AMZN long-term at discounts

Summary

Amazon's Q3 earnings result significantly surpassed market expectations, primarily driven by robust re-acceleration in its highly profitable cloud-computing division, Amazon Web Services (AWS). AWS reported a 20% year-over-year sales increase to $33.0 billion, its fastest growth rate since 2022, fueled by strong demand for AI and core infrastructure.

Overall net sales grew 13% to $180.2 billion, beating analyst consensus. Despite special charges of $4.3 billion (related to a legal settlement and severance costs), the quarter’s performance was strong, with net income bolstered by a $9.5 billion pre-tax gain from an investment in Anthropic. The strong results and positive commentary, especially on AI-driven AWS momentum, led to a significant rally in Amazon's stock (AMZN), which rose over 13% after the release, reflecting increased investor confidence in its growth trajectory.

Options Trading Analysis for Long-Term AMZN Investors

As a long-term Amazon investor, selling put options on AMZN is a powerful options strategy that allows you to generate income while simultaneously setting a lower target entry price for accumulating more shares. This is often called a "cash-secured put" strategy.

Rational for Options on AMZN Now

Playing options on AMZN is particularly compelling right now for a long-term investor due to the recent sharp post-earnings stock price increase and the underlying fundamental strengths:

Premium Income: The high implied volatility (IV) often seen after a major earnings beat/surge (and common for a growth stock like AMZN) means put options command a higher premium (the price you receive for selling the put). This provides a more substantial income stream.

Defining Your Buy Price: You are a long-term investor, and a 13%+ surge may have pushed the stock above your desired buy-in level. Selling a put allows you to select a more attractive strike price (buy price) while getting paid to wait.

Fundamental Confidence: Your long-term view implies you are comfortable owning more AMZN shares. Selling a put is a bullish-to-neutral strategy; if the stock falls below your strike price, you are obligated to buy the shares, but you get to buy them at a discount (Strike Price minus the Premium received).

Appreciate if you could share your thoughts in the comment section whether you think selling puts options on Amazon while holding stocks for long-term would be a good way to take advantage of its recent upside.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.