AMC Entertainment Skyrockets And Options Traders Pile In

AMC Entertainment Holdings Inc AMC gapped up 8% Wednesday morning and then ran another 10% north back toward its Jan. 27 high of $20.36.

On Tuesday, a number of options traders piled into GameStop Corporation GME and bet over $367,915 shares of the gaming retailer are headed higher. On Wednesday, that was dwarfed by the number of institutions betting AMC Entertainment's stock is about to surge.

The company was the target of a short squeeze at the beginning of the year, along with GameStop, and its shares skyrocketed over 600% in only four days, before plummeting over 70% in the nine days that followed.

Options traders may believe another larger short squeeze is in the works and bet over $1.9 million that AMC Entertainment is about to surge further, with a few traders taking call options with a $40 strike price.

See Also: How to Buy AMC Stock Right Now

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The AMC Entertainment Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:34 a.m., Wednesday a trader executed a call sweep, near the ask, of 328 AMC Entertainment options with a strike price of $20 expiring on May 28. The trade represented a $44,608 bullish bet for which the trader paid $1.36 per option contract.
• At 9:35 a.m., a trader executed a call sweep, near the ask, of 229 AMC Entertainment options with a strike price of $16 expiring on May 28. The trade represented a $67,097 bullish bet for which the trader paid $2.93 per option contract.
• At 9:41 a.m., a trader executed a call sweep, above the ask, of 241 AMC Entertainment options with a strike price of $15 expiring on Jan. 20, 2023. The trade represented a $232,565 bullish bet for which the trader paid $9.65 per option contract.
• At 9:46 a.m., a trader executed a call sweep, near the ask, of 256 AMC Entertainment options with a strike price of $16 expiring on May 28. The trade represented a $68,608 bullish bet for which the trader paid $2.68 per option contract.
• At 9:49 a.m., a trader executed a call sweep, near the ask, of 200 AMC Entertainment options with a strike price of $18 expiring on June 18. The trade represented a $75,000 bullish bet for which the trader paid $3.75 per option contract.
• At 9:52 a.m., a trader executed a call sweep, near the ask, of 300 AMC Entertainment options with a strike price of $10 expiring on July 16. The trade represented a $67,097 bullish bet for which the trader paid $8.50 per option contract.
• At 9:57 a.m., a trader executed a call sweep, near the ask, of 489 AMC Entertainment options with a strike price of $40 expiring on June 18. The trade represented a $66,993 bullish bet for which the trader paid $1.37 per option contract.
• At 9:57 a.m., a trader executed a call sweep, near the ask, of 846 AMC Entertainment options with a strike price of $40 expiring on June 18. The trade represented a $121,220 bullish bet for which the trader paid $1.35 per option contract.
• At 9:58 a.m., a trader executed a call sweep, near the ask, of 420 AMC Entertainment options with a strike price of $20 expiring on May 28. The trade represented a $74,340 bullish bet for which the trader paid $1.77 per option contract.
• At 9:59 a.m., a trader executed a call sweep, above the ask, of 280 AMC Entertainment options with a strike price of $15 expiring on Jan. 21, 2022. The trade represented a $211,000 bullish bet for which the trader paid $8.44 per option contract.
• At 10:02 a.m., a trader executed a call sweep, near the ask, of 290 AMC Entertainment options with a strike price of $19 expiring on June 18. The trade represented a $118,900 bullish bet for which the trader paid $4.10 per option contract.
• At 10:12 a.m., a trader executed a call sweep, near the ask, of 392 AMC Entertainment options with a strike price of $18 expiring on June 18. The trade represented a $158,760 bullish bet for which the trader paid $4.05 per option contract.
• At 10:23 a.m., a trader executed a call sweep, near the ask, of 582 AMC Entertainment options with a strike price of $18 expiring on May 28. The trade represented a $137,352 bullish bet for which the trader paid $2.36 per option contract.
• At 10:46 a.m., a trader executed a call sweep, near the ask, of 200 AMC Entertainment options with a strike price of $13.50 expiring on June 18. The trade represented a $94,800 bullish bet for which the trader paid $4.74 per option contract.
• At 11:04 a.m., a trader executed a call sweep, near the ask, of 392 AMC Entertainment options with a strike price of $20 expiring on June 18. The trade represented a $138,768 bullish bet for which the trader paid $3.54 per option contract.
• At 11:07 a.m., a trader executed a call sweep, near the ask, of 240 AMC Entertainment options with a strike price of $16 expiring on May 28. The trade represented a $72,000 bullish bet for which the trader paid $3.00 per option contract.
• At 11:08 a.m., a trader executed a call sweep, near the ask, of 505 AMC Entertainment options with a strike price of $16 expiring on May 28. The trade represented a $156,550 bullish bet for which the trader paid $3.10 per option contract.

AMC Price Action: Shares of AMC Entertainment were trading up 16% to $19.03 at publication time.