Options Update: Amazon.com (AMZN) & Merck (MRK)
Amazon.com (AMZN)
AMZN March volatility flat; AMZN announces $1B stock buyback.
AMZN is recently trading up $2.17 to $72.98.
AMZN announced the repurchase of up to $1 billion of the company's common stock within the next 24-months.
AMZN has a market cap of $30 billion.
STFL says, "Product ads have just launched and will not be meaningful in the near-term but with Product Ads, AMZN Direct, AMZN Mobile, AMZN Digital, Marketplaces, and Merchants@ combined with solid execution, we may be witnessing the emergence of the strongest competitive advantage on the internet. It may be, in fact, that AMZN is the real GOOG."
AMZN February option implied volatility of 50 is near its 26-week average, suggesting non-directional price movement.
Merck (MRK)
MRK volatility elevated; MRK announces $650 million allegations settlement.
MRK is recently down $1.15 to at $44.53.
MRK announced on Feb. 7 it has agreed to pay more than $650 million to resolve allegations that it failed to pay proper rebates to Medicaid and other government healthcare programs.
MRK call option volume of 3,925 contracts compares to put volume of 7,326 contracts.
MRK March option implied volatility of 37 is above its 26-week average of 29, suggesting traders are positioning for a downside move.
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About Paul Foster
Paul Foster is a former member of the Chicago Board Options Exchange with 21-years of professional experience in the capital markets, investments, trading, corporate finance, arbitrage, options and mergers & acquisitions. His writing about the options market has appeared in a wide variety of publications.
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