๐ Part 2: AMZN Midweek Options Update: Options Spread Strategy (56-95% Gain) vs Buy Call Speculation (-99% Loss)
As of 11 February 2026, With $Amazon (AMZN.US)$ moving toward the lower end of the "expected move" for post earnings this week, weโre seeing a classic textbook example of how different option structures react to price volatility. Would price rebound in the next 3-4 days like historical earnings cycle like 2025/Q1 and 2024/Q2? Let's continue to watch how it plays out:
When trading options, your "structure" often matters as much as your "direction." Hereโs a breakdown of how these three positions are performing as of February 11, 2026 after performing our Part 1 AMZN expected move analysis before earnings in this previous post: Why Mid Week Options Offer 'Peace of Mind' in Earnings Trading for AMZN?
๐ก๏ธ The Strategic Plays: Vertical Spreads
Spreads are defined-risk strategies. By both buying and selling an option simultaneously, you offset the cost and "hedge" your Greeks (like Delta and Theta).
ย ย โฆ The Lesson: By selling premium (the 205.00P) and buying a lower wing (190.00P) for protection, this trade benefits from time decay and the stock staying above or below specific levels.
(1) Vertical Credit Spread (Option Selling by Expected Move): Currently sitting at a +56.21% unrealized gain.
ย ย โฆ The Lesson: This setup (207.50P Buy / 205.00P Sell) reduced the entry cost compared to buying a single option, making it easier to reach a high percentage return even with smaller price movements.
(2) Vertical Debit Spread (Option Buying with Bearish Outlook): Showing a strong +95.00% unrealized gain.
๐ฒ The Speculative Play: Long Out-of-the-Money (OTM) Call
(3) Single Leg Call (The "Lottery Ticket"): Currently at -99.99%.
ย ย โฆ Delta: Dropped toward 0, meaning the option no longer gains value from small price moves.
ย ย โฆ Extrinsic Value: Because the stock is far from the strike price and time is running out, the "time value" has evaporated.
โ Why it happened: As AMZN moved against the trade, two things crushed the value:
โ Position close: Since this option is far OTM, I can let it expire worthless as it has reached near maximum loss
๐ก Educational Note: If this had been a Long Put instead, the position would have benefited from the "gap down" move. However, remember that "unlimited reward" comes with the high risk of 100% capital loss if the stock doesn't move far enough, fast enough.
๐ฌ Over to You!
The market has tested the lower boundaries of expected move. Did you perform similar option trades with defined-risk spreads, or did you win the "lottery ticket" swing?
How are your AMZN position faring this week? Letโs discuss below! ๐
#OptionsTrading #AMZN #StockMarket #Investing101 #Moomoo #TradingStrategy #OptionsTrading #ExpectedMove #RiskManagement
Disclaimer: Options involve risk and are not suitable for all investors. Gains/losses shown are unrealized and based on specific market conditions. Past performance does not guarantee future results.
Beat Wall Street, Be an Options Hunter, Earn Income Faster! Happy trading, Happy hunting! ๐ฏ
โ ๏ธ Disclaimer: This is for tracking my trades and strategies for personal review. Not investment advice โ always do your own research and ensure it fits your risk tolerance.
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