Amazon could see a huge move on earnings next week, and it’s making some investors nervous

Amazon is set to report earnings next Thursday after the market closes, and the options market is implying a relatively large post-earnings move for the stock. One derivative strategist said the move is expected to be quite notable.

"Investors are really nervous about this stock, just in terms of how big the movement could be," Stacey Gilbert, head of derivative strategy at Susquehanna, told CNBC's "Trading Nation" on Friday. Here are her reasons.

• The options market is implying a move of about 7 to 8 percent on its earnings report. This is high relative to its average post-earnings move of around 5 percent. Amazon's last earnings report, in October, saw an initial move higher of over 7 percent.

• The move is likely to be bullish, but investors are bracing for the sheer magnitude of the options market's implied move.

• The bullish options buying is driving up this volatility, but the sentiment continues to appear positive despite the rather volatile expectations.

• As the stock is already up a hefty 20 percent year to date, it's not entirely surprising to see investors utilizing options to express their opinions heading into this earnings report.

Bottom line: Investors are expecting a significant move post-earnings for Amazon shares.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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