Beware the Ides of October

Bezos sells record amount of stock, second inside sale in 3 months.

Amazon Spooks Investors With Big Spending Heading into Holidays.

Why Amazon’s Holiday Season Forecast Is Disappointing Investors

A survey of investors by Bank of America Corp. showed cash holdings match the highest levels since the terror attack on the U.S. on Sept. 11, 2001.

There is still downside risk even though the stock is down after hours.  Taking a look at the Options chain, we recommend, for speculative accounts only, the $730 2/17/17 AMZN puts last sale at $21.25.  For less risk seeking accounts, the $800 2/17/17 AMZN puts are selling for $44.10 and are nearly in the money.

An additional short or put idea is in the console vs. smartphone gaming business.  The largest player is Electronic Arts (NASDAQ: EA).

Even with an installed base of 101 million Wii units, 80 million PlayStation 3 systems, 80 million Xbox 360 consoles, 13 million PlayStation 4 machines, 7 million Xbox One units, and 7 million Wii U systems, the console business can’t compete with the sheer billions of smartphone and tablet users around the world.

“Practically everyone in mature markets now has a smartphone and the majority has access to a tablet,” van Deelen says. “In emerging markets, the smartphone is often their first device that is connected to the Internet. With an installed base of billions, the audience is enormous on a global scale. A console is not a must-have device like smartphones, and in a growing number of cases, tablets are. Mobile devices, which aren’t purchased to play games on, introduce new consumers to games.”

The overall question now seems to be not if Microsoft will exit the game business, but when and how.

For speculative accounts only, we recommend the EA 3/17/17 $75.00 puts selling for $3.35.

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