A 'Most Unusual' Amazon Short Opportunity

Jay Shartsis of R.F. Lafferty said Amazon.com, Inc.

is a strong short sale candidate. Shares of Amazon, the online retail giant, have dropped 14.66 percent this year and underperformed the benchmark S&P 500 index, which declined only 0.65 percent. The stock is also about 15 percent lower than its December 29th peak of $696.44. "First of all, it has been appearing daily in our diminished IV study, which is designed to identify short sale candidates. Next, many of its call options are trading far, vary far below their "theoretical" values," Shartsis wrote in a note to clients. Shartsis pointed out that AMZN's April 620 call ""theoretically" worth $3.50, is only 0.69 bid, which is nearly 80% below that "theoretical" figure. I don't recall ever seeing such a dramatic undervaluation in Amazon calls." Shares of Amazon were currently down 0.88 percent to $587.97.