Shorting out-of-the-money AMZN puts generates attractive one-month yields

What happened: Nasdaq, Inc. (NDAQ) stock hit a three-month low, Tesla Inc. (TSLA) stock continued its decline, pushing up put option premiums, while Amazon Inc. (AMZN) stock remained flat. Unusual put option activity was observed in Robinhood Markets Inc. (HOOD). Shorting out-of-the-money (OTM) put options in these stocks generated attractive one-month yields: 1.8% for AMZN, 2.0% for TSLA, and 1.36% for HOOD.

Market impact: This narrative affects tech and growth stocks, particularly those with recent price declines or volatility. Shorting OTM puts allows investors to profit from stable or rising stock prices while earning yield. For TSLA, analyst price targets remain high despite the stock's fall, indicating a potential disconnect between price and fundamentals.

What to watch next: Investors should monitor TSLA's earnings release on April 26, as it could provide clarity on the stock's recent decline. Additionally, keep an eye on AMZN's stock price around its 5% lower strike price (currently around $2,650) to see if the short put strategy plays out. Lastly, watch HOOD's stock price and option activity around the 10% lower strike price (currently around $11.35) to determine if the unusual put action signals a bottom.