What could go wrong?
Recall that in late July, hedge fund managers were betting that Amazon not Apple would become the first trillion dollar company. Within days, Amazon pulled back, while Apple gained 20% in August. Talk about the smart money, their prediction was measured in hours. One need not wonder how they were positioned:
Now, deja vu, gamblers have made massive bets on Amazon breaking and holding the trillion dollar mark by the end of this week:
"On Thursday, Amazon saw a surge of options activity at two times its average daily call volume
Shares of Amazon have jumped nearly 6 percent in just the past week...The move was fueled by a massive price target upgrade from $1,850 to $2,500 by Morgan Stanley on Wednesday."
Amazon's big run started last November, since then it's up 110% in a straight line.
Due to the heavy buying action in the options market, options market makers are now long the stock to hedge their call option (short) exposure:
Which means that when the call options are closed out, the bubble will deflate. As the most anticipated event in bubble history reaches its climax...
