On CNBC's "Options Action," Dan Nathan suggested that investors with a long position in Amazon.com, Inc. AMZN should use options to protect the profit.
He would sell the August 1,045 call for $26, against the long stock position of 100 shares and buy the August 950 put for $26. The sale of the call would finance the purchase of the put and he would have a protection below $950, which is 4.60 percent below the current market price. If Amazon.com trades higher, Nathan is going to be able to participate in the upside up to the $1,045 price level, which is almost 5 percent above the current price.
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