Carter Worth And Mike Khouw's Amazon Options Trade

Carter Worth shared with the viewers of CNBC's "Options Action" a bullish technical analysis of Amazon.com, Inc. AMZN.

The stock traded sharply higher in 2020 and then it consolidated for the last 10 months. Worth sees this as a setup for a breakout and his belief that it will happen is strengthened by Amazon's recent outperformance of the S&P 500. Worth is a buyer of the stock.

Mike Khouw would use a broken wing call butterfly to trade Amazon. He wants to buy the August $3,650 call, sell two August $3,850 calls and buy the August $3,950 call. The trade would cost him $31.40 and it would reach its peak profits at $3,850. Khouw is using a broken wing butterfly to make money at any level beyond $3,850.