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Mystery trader bets Amazon could hit a new all-time high after earnings

VIDEO2:0802:08
Despite heat from White House, options traders are betting on Amazon

Amazon could be primed for a new all-time high.

That's according to one mystery trader, who on Wednesday bet that shares of the e-commerce giant could jump by at least 4% after its earnings report, Mike Khouw, co-founder and chief strategist at Optimize Advisors, said Wednesday on CNBC's "Options Action."

Market watchers are expecting that report — set to be released after Thursday's closing bell — to reveal the fruits of Amazon's shift to one-day shipping for Prime members, as well as its annual shopping holiday, Prime Day.

And, for said mystery trader, that could mean record highs for the stock, which was hovering around the $1,990 level in early Thursday trading. Amazon's all-time intraday high is $2,050.50, hit last September.

On Wednesday, the mystery buyer put on a trade that was "a purchase of the $2,060/$2,065 call spreads," Khouw said. "Somebody paid just over a buck for a couple hundred of those, and that is going to be profitable if Amazon rises by 4%."

What stood out to Khouw was the trader's strategy: by buying a bullish call spread with options premiums at lower-than-average levels, the buyer effectively gets a better bang for their buck.

"You're able to get quite a lot of leverage on a relatively small move for Amazon of 4% to the upside," Khouw said, noting the trade offers a "payout of about 4 to 1."

Guy Adami, director of advisor advocacy at Private Advisor Group, wasn't quite as bullish as this mystery bettor.

"Listen, I have no doubt they're going to report a great quarter," he said in the same "Options Action" segment. "However, is the setup as good as it was a month, a month and a half ago when it was an $1,800 stock?"

Amazon shares were down less than 1% lower in early Thursday trading. The stock is up nearly 33% year to date.

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