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The Amazon.com (AMZN) rollover has finally begun.

As the company prepares to release its earnings later today, the shares stand at about $270/share, down from an all-time high of $285 achieved last week.

Amazon has long been a company Seeking Alpha readers love to hate. Mainly they hate its lack of earnings. Graph its earnings history, whether on a quarterly or annual basis, and you mainly see a flat line hugging the zero. The "Whisper Number" for December earnings, which everyone thinks were stellar, is 33 cents/share.

But with Amazon, of course, it's all about the top line, not the bottom one. The fourth quarter is usually Amazon's best, and it's expected to rack up $22.26 billion in sales for that quarter, for a total of about $70 billion for the year. That would be 44% higher than last year's $48 billion, which in turn was double the total from two years earlier.

You're buying growth with Amazon. Big growth, off big numbers. Earnings don't matter when the top line is like that, we're told. Analysts are still pounding the table for the stock, notes Selerity, and Macquarie Capital says the cloud business alone would be worth $30 billion, with an eight times revenue multiple. That would mean a "real" price of $90 billion for the retailer. I think that when analysts start spinning these kinds of webs the stock they're touting is heading for a fall.

Still, Amazon keeps innovating. Yesterday, for instance, it announced Elastic Transcoder, a service that lets businesses store video on its servers for as little as 1.5 cents/minute. That's $3 to store a movie for instant downloading, $6 for an HD film. Which means lots of people can now compete with Netflix (NFLX), possibly killing companies like Zencoder, which pioneered this business.

Why might now be a good time to put in some options below $270, and which is the best way to play this?

Start with the tax man. I've said before that, in the long run, this is a net positive for Amazon, which can make money charging other companies to handle the complex calculations required for tax collection. But in the short run it's a negative. And it's not just the sales tax man that's after the company, now. It's the income tax man, starting in Europe.

Then there's the simple law of numbers. As numbers get bigger they get harder to grow. Based on current estimates Amazon.com will report today that's now nearly one-tenth the size of Wal-Mart (WMT) on the top line, and while Wal-Mart numbers there have grown just 10% in the last two years, it has in fact added nearly $39 billion in sales during that time. Amazon's 2011 sales were $48 billion.

Everything falls to Earth in time. Apple (AAPL) has fallen to Earth with a thud. Amazon has climbed a wall of worry to reach its present heights, but too many analysts are now expecting too much of the company.

I think you'll be able to catch it at $200, and you won't lose much betting a little against a further rise. If I'm wrong on the earnings, kill the option fast.

Source: How Far Will Amazon Roll Over?