Investment Review №333. Right to hedge
LONG CALL ON NEM
Investment Rationale
Amazon is a multi-service technology group: the largest online retailer, a major seller of advertising products and the operator of the cloud platform AWS (Amazon Web Services) — a provider of computing capacity for training and running AI models and for data storage. In Q3 2025 the company’s revenue was ≈ $180.2bn, and AWS revenue accelerated to ≈ $33.0bn.
Investment Idea
Buy the call option +AMZN.16JAN2026.C235 — a tactical bullish bet on the combination of several positive factors: re-acceleration of the cloud business and continued demand for computational capacity for AI, stronger advertising revenue (higher-margin sales), and a seasonal pickup in retail sales during the holiday period. The idea assumes a holding period of ≈ 8 weeks; premium target $21.50 (entry premium $13.16).
Key Arguments
- AWS — a durable driver of revenue and margin. Amazon’s cloud business re-accelerated to roughly 20% YoY growth and contributes a substantial share of the group’s profitability. Demand for computational capacity for training and inference of large models remains high. Large corporate contracts and long-term projects strengthen the revenue base from the cloud, providing Amazon with a solid foundation when news about increased infrastructure orders is positive.
- Advertising growth — improving revenue mix. Amazon’s advertising platform is growing faster than core retail and generates higher-margin revenue; higher advertiser spend during the holiday season raises average revenue per user and increases operating profit, which can positively affect the company’s valuation if quarterly results are favorable.
- Seasonal catalyst — major sales events and holiday campaigns. Events such as Prime Big Deal Days and Black Friday traditionally concentrate transaction flows: increases in gross merchandise volume (GMV) and order counts are typically accompanied by higher advertiser spend. Even if the average order value (AOV) falls somewhat due to discounts, the aggregate effect on revenue and expected volatility can be material and support option premium appreciation.
| Strategy | Long Call |
| Ticker of the Underlying | AMZN |
| Recommendation | BUY |
| Strike and Option Type | CALL $235 |
| Expiration Date | 16.01.2026 |
| Current Price (Mid) | 13,225 |
| Strategy Cost | $1322,50 |
| Greek Parameters |
Delta – 0,543 Gamma – 0,013 Vega — 0,385 Theta – -0,114 |
| Implied Volatility | 32,58% |
| Realized |
1М – 42,64% 3М – 33,37% 6М – 30,15% 12М – 34,89% |
P/L of the option strategy
Trade Parameters
| Strategy | Long Call on AMZN |
| Strike | Long CALL 235 |
| Buying | +AMZN*G1G235 |
| Exp Date | 16.01.2026 |
| Margin Requirement | $1322 |
| Entry Price | $2150 |
| Max Prifit | $Inf |
| Max Loss | $(1322) |
| Expected return | 63% |
| Breakeven Point | $248,23 |
Position Management
If on the expiration date of January 16, 2026, the underlying asset’s price is above $235 but below $248,23, the investor will incur a variable loss. If the underlying asset’s price falls below $248, the investor will face the maximum loss of $1322. If the underlying asset’s price rises above the breakeven point of $248,23, the potential profit is unlimited. However, we recommend closing the position once the call option reaches a value of $2150.