A bullish options trade on amazon into earnings as the stock bounces off key support

With earnings as the primary focus this week, Amazon (AMZN) sits at the intersection of both enterprise and consumer spending. With Microsoft's earnings providing a glimpse into how

enterprise clients are continuing to add cloud services, my expectations are for AMZN to follow with a similar trend on Thursday's report. Additionally, after hosting its biggest Prime

day in July and October, spending and retail sales continue to show a resilient consumer. Moreover, Amazon's inroads into foreign markets such as Australia provide an additional boost

to Prime revenue. When we look at a chart of AMZN, we see that it has recently formed a support level around $125 and recently bounced higher off that level. AMZN 1Y mountain Amazon, 1-year

Moreover, we see that AMZN has continued to outperform both the tech and consumer discretionary sectors going into earnings, which is a strong indication of a potential beat. However, we

should remain cautiously optimistic as guidance for the rest of 2023 and into 2024 would likely be a primary driver of the stock's reaction after earnings. As the outlook for consumer

spending looks more uncertain, that is the primary risk I see going into this earnings report. My view is that we should utilize options to take a bullish view going into this earnings

report, thus mitigating those risks. The implied volatility on AMZN at the moment is quite high, with IV Rank sitting at 50%, so my preference is to be a seller of options. I'm looking

to sell the Dec 1 $124/$115 Put Vertical spread at a $3.17 credit. A vertical spread is selling options with the same expiration, but different strike prices. So this trade entails selling

the $124 put option and the $115 put which both expire Dec. 1. This strategy will risk $583 per contract if AMZN is below $115 on expiration with a maximum reward of $317 per contract if

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