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Dan Nathan's Amazon Hedge

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On CNBC's "Options Action," Dan Nathan suggested that investors with a long position in Amazon.com, Inc. (NASDAQ: 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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Posted-In: CNBC Dan Nathan Options ActionAnalyst Color Options Markets Media Trading Ideas

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