To The Moon

$Apple(AAPL)$ hits new highs, $Amazon.com(AMZN)$ might create a new lows, I think it might be a good time to look at the breakdown of the situation, along with how one might think about “options plays” (literally options contracts) on Amazon.

We have both Apple and Amazon releasing their quarterly results on 30 Oct. So this might be the time to look at the situation, myself have both Apple and Amazon in my portfolio, so I will be sharing how I intend to play option for Amazon.

What’s Going On With Apple

Strengths

Apple just hit an all-time high, driven by strong early sales of the iPhone 17, particularly in the U.S. & China.

Technicals appear bullish: breakout from a “pennant” pattern, golden cross (50-day moving average crossing above the 200-day) noted in some commentary.

Analyst commentary remains positive: e.g., Loop Capital upgraded Apple, seeing further upside potential.

Risks / Things to watch

The stock is already at new highs, so the “easy” upside may be more limited; risk of pull-back is higher than when the stock was cheaper.

Some concern it may be behind in the AI race relative to other tech peers, which could temper longer-term growth.

If you chase at the top, you’re exposing yourself to the “what if the key catalyst disappoints” risk (iPhone cycle falters, macro weakens, etc).

So for Apple: If we believe the strong iPhone cycle + future innovations justify more upside, it might be reasonable. But you’re buying strength, which often means higher risk. Analysts still bullish, but the margin for error is smaller.

What’s Going On With Amazon

Potential positives

Amazon is undertaking large-scale investment (>$100 B in capex for 2025) particularly tied to AI and logistics. One article called this “game changer”.

Some technical commentary suggests Amazon is in an uptrend when you look at moving averages (though this may be in conflict with your “new lows” thesis).

If one believes the company can leverage logistics + AI + Prime ecosystem in meaningful ways, then Amazon has latent upside.

Potential risks / things holding it back

Amazon hasn’t been outperforming this year: in the markets news article, it noted Amazon was down in 2025 while tech broadly rose.

The market may price in execution risk: big capex doesn’t guarantee commensurate returns, especially if competition/sector pressures mount.

If one is thinking “bottoming”, the question becomes: how confident are you Amazon has hit its bottom (or is close to it)? That is always hard to time.

So for Amazon: If you’re bullish on the long-term story (AI/logistics/Prime ecosystem) and believe the stock is undervalued or under-appreciated now, then yes, it’s an interesting contrarian or “value + growth” tilt. But catching the bottom is tricky.

Decision Framework: Apple vs Amazon

Here is how we might think about choosing between the two (or splitting exposure) given our viewpoint:

If we are looking for momentum: Apple has the momentum advantage (new highs, strong product cycle). But momentum means less cushion for downside.

If we are looking for asymmetry (higher upside, higher risk): Amazon may offer more upside if it recovers/executes well, but also more risk if it doesn’t.

Time horizon matters: Apple may be more “safeish” for shorter-to-medium horizon; Amazon might be more “play the turnaround” for medium-to-longer horizon.

Risk tolerance: If you are more risk-averse, you might prefer Apple (though note “high momentum” means less margin of safety). If you are willing to ride volatility, Amazon could be the higher reward/higher risk side.

Portfolio context: What else do we own? If we already have high exposure to high-momentum names and little exposure to “turnaround” stories, Amazon might diversify our mix.

Top chart — Apple (AAPL): continued-rally scenario (median drift +20% p.a.). Median (p50) shows a steady rise; p10–p90 and p25–p75 bands show uncertainty around that path.

Bottom chart — Amazon (AMZN): downside scenario (median drift −5% p.a.) with a one-time shock (≈30% drop in 25% of simulated paths at year 1). Median drifts down over 5 years; bands show wider uncertainty and the effect of occasional shocks.

Options plays for Amazon For My Portfolio Consists Of Both Apple and Amazon

In this section, I would like to share how we might play options on AMZN (Amazon) when I already own it (especially given my portfolio exposure) — with potential upside participation + downside protection.

Current Setup & Objective

I own Amazon (and also AAPL). I would like to stay exposed to Amazon’s upside but also limit or hedge risk if Amazon falls significantly.

Options allow me to do both: preserve upside, cap downside (or at least limit it) with defined cost. According to sources, options can be used to enhance or hedge a portfolio of stocks.

Trade-offs: Hedging costs something (premium, or limited upside) and I may need to accept some trade-offs (capped gains, cost drag).

Two Key Option Strategies for My Case

1. Protective Put (“Insurance”)

I own Amazon shares → buy a put option on Amazon with a strike somewhat below current price. That gives me the right to sell at the strike, so my downside loss is limited over the time horizon of the option.

If price falls below the strike, I am protected; if Amazon rises, I still participate (minus the cost of the put).

Cost = premium paid. If Amazon does not fall, I lose the premium. That’s the “insurance fee”.

Good if we are worried about a significant drop but want to keep the shares.

2. Collar (Buy Put + Sell Call)

Because I like upside but want protection, I can implement a collar:

Buy a put (downside protection)

Sell a call with strike above current price (I give up some upside beyond that strike)

The premium we receive from selling the call can offset (partially or fully) the cost of the put.

Result: We define a band: we will be protected below our put strike, but we will cap our upside at the call strike.

Great if we believe Amazon will rise modestly (or we are content with a target) and want to avoid a crash.

Structure Of Protective Put

 The graphs show how payoff vs underlying price looks: protective put gives a “flat floor” below strike; collar gives flat floor + flat cap.

Helps us decide where we want our strike levels to be (how much downside we accept, how much upside we are willing to forgo).

Implementation – Steps & Considerations

Decide your horizon: How long do we want the protection? 1 month, 3 months, 6 months?

Choose strike prices:

• For the put: maybe a strike 5-10% below current price (for example).

• For the call (if collar): a strike maybe 10‐15% above current price (or where you would be comfortable selling the stock).

Calculate cost & break-even: premium outflow for put (net cost after call premium if collar).

Consider implied volatility & option premium: higher volatility = more expensive protection.

Understand trade-offs:

• With pure put: upside unlimited, cost of premium.

• With collar: cost lowered (maybe zero cost), but upside capped at call strike.

Monitor & roll: If we pick a short horizon and Amazon still holds after expiration, we will need to roll or decide what to do next.

Tax & assignment risk: Selling calls means if the call is in‐the‐money at expiry we might get assigned (i.e., sell our shares). Make sure we are OK with that.

Example (Hypothetical)

• Assume Amazon currently ~$220 (as per latest).

• Buy a 3-month put strike $200 (protection if it drops below $200).

• Sell a 3-month call strike $250 (you cap upside at $250).

• Net cost: premium for put minus premium received for call. If they offset, we might pay little outright.

• If Amazon falls to $180 → our put kicks in, we effectively sell at $200 → our loss is limited.

• If Amazon rises to $260 → our shares get called at $250 → we participate up to $250 but no more.

• If Amazon stays between $200 and $250 → both options expire worthless and we keep our shares + net cost/credit.

My Final Thoughts

Since I am holding Amazon (and Apple), I am already exposed. Using options lets me tilt my risk profile: reduce downside while maintaining upside.

If we are very bullish on Amazon and do not care about a crash, maybe no hedge (or minimal). If we are cautiously bullish, the collar is attractive.

We must be comfortable with the cost (premium) and/or the cap on upside.

It is wise to treat this as part of our risk-management toolbox rather than speculation. Options are more complex.

Also ensure our options account is approved for these strategies and we understand assignment, liquidity, margin, and other risks.

Summary

As of late October 2025, Apple (AAPL) and Amazon (AMZN) present contrasting scenarios for investors.

Apple's stock has surged to new all-time highs, breaking out of a slump. This turnaround is driven by stronger-than-expected early sales of its new iPhone 17 series, which is significantly outpacing its predecessor in key markets like the U.S. and China. Analysts are upgrading the stock, citing this powerful product cycle and strong demand ahead of its upcoming earnings report.

Conversely, Amazon's stock has underperformed, lagging behind its "Magnificent 7" peers in 2025. While not at new lows, it's trading near technical support levels. This weakness stems from concerns over slowing growth in its crucial AWS cloud division, which faces stiff competition from Microsoft and Google, as well as a recent significant service outage.

Investors face a choice: chase Apple's proven momentum, betting that strong sales will continue to propel the stock, or "bottom-fish" Amazon, betting that its current underperformance represents a buying opportunity. Analysts remain broadly bullish on Amazon, and a dip could be an attractive entry point, given its strong seasonal trends.

For Amazon investors who believe the stock is at or near a bottom, a popular options strategy is selling cash-secured puts. This allows an investor to collect a premium for agreeing to buy AMZN shares at a lower price (the strike price) if the stock falls. If the stock stays flat or rises, the investor keeps the premium. For instance, traders have been selling out-of-the-money puts with strike prices around $200, either to generate income or to acquire the stock at a discount.

Appreciate if you could share your thoughts in the comment section whether you think using option for Amazon as leveraged bet on its recovery might help to re-balance our portfolio.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.