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Traders bet Amazon could hit a $1 trillion market cap next week

Options traders bet Amazon will hit its $1 trillion milestone by next week
Options traders bet Amazon will hit its $1 trillion milestone by next week

As Amazon scores fresh all-time highs and is now just inches away from a $1 trillion market cap, some traders are betting the retail giant could hit the milestone as soon as next week.

Amazon's unrelenting dominance in the consumer space has pushed the company's shares up 72 percent this year and it is now just one of a handful of stocks trading above the $2,000 level. According to Dan Nathan, co-founder and editor of RiskReversal.com, options traders are betting the retailer could reach a trillion-dollar value by next Friday.

On Thursday, Amazon saw a surge of options activity at two times its average daily call volume. Within the action Nathan highlighted a block of traders who purchased the Sept. 7 weekly 2050 calls paying an average of $9 per contract.

"It's really important to remember $9 seems like a lot, but not on a $2,000 stock, that's less than a half a percent of the stock price," he said Thursday on CNBC's "Fast Money." This bullish bet also implies that shares of Amazon will be above $2,059, and officially at the trillion-dollar threshold, by next Friday's expiration.

Shares of Amazon have jumped nearly 6 percent in just the past week, notching an intraday all-time high of $2025.57 at one point. The move was fueled by a massive price target upgrade from $1,850 to $2,500 by Morgan Stanley on Wednesday.

According to Nathan, while market optimism will likely push Amazon to $1 trillion "sooner or later" the options market is only implying a 25 percent chance that it will happen by next Friday.

"The probabilities are going to decline as we go day by day," he said, "I'm not sure buying those out-of-the-money calls a week ahead is the way to play it."

Amazon's stock is up 105 percent in the past year and was higher Friday afternoon at around $2,010.