Buying AMZN put contracts.

Amazon.com (AMZN) has traded sharply higher over the last two weeks in what looks like a typical bear market rally.

The rebound brings AMZN back close to key resistance areas, and could reverse quickly. The stock continues to be over-valued compared to earnings which leaves plenty of room for AMZN to move lower. Especially if the broad market weakens once again.

We’ve got plenty of bullish exposure in our speculative trading account right now. Buying AMZN put contracts helps to balance our exposure and gives us a chance to profit from a re-test of recent lows.