AMC Options Traders Can't Stop, Won't Stop

AMC Entertainment Holdings, Inc. AMC was trading up almost 7% higher at one point on Friday amid continued retail interest in the stock. The company has been a target of a second short squeeze that, unlike in January when the stock’s meteoric rise and fall lasted only about eight trading days, is lasting much longer.

AMC hit an all-time high of $72.62 on June 2, rising almost 500% from its May 24 opening price of $12.17. Following the squeeze, AMC retraced 45% to $39.75 but has since shot back up toward its record high. The stock is popular within Reddit communities due to its underlying statistics:

• The stock has a short interest of 22.85% which means 102.3 million of its total 448.56 million share float is held short. Notably, the short interest has risen by 14.75 million more than on April 30.
• There is also speculation that naked shorting is occurring heavily on AMC’s stock and if the naked shorts are required to cover, the stock could rocket further.
• Institutions also seem to be a fan of the stock and have repeatedly purchased call contracts, throughout the past two weeks, on the stock. On Friday morning, the flurry of activity continued with options traders throwing over $3.02 million into AMC calls.

See Also: AMC, Clean Energy Fuels, BlackBerry Continue To See High WallStreetBets Interest; Corsair, Petco See Drop

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 9:32 a.m., Monday a trader executed a call sweep near the ask of 281 AMC Entertainment options with a strike price of $65 expiring on June 25. The trade represented a $267,231 bullish bet for which the trader paid $9.51 per option contract.
• At 9:32 a.m., a trader executed a call sweep near the ask of 252 AMC Entertainment options with a strike price of $65 expiring on June 25. The trade represented a $239,400 bullish bet for which the trader paid $9.50 per option contract.
• At 9:32 a.m., a trader executed a call sweep near the ask of 277 AMC Entertainment options with a strike price of $65 expiring on June 25. The trade represented a $263,150 bullish bet for which the trader paid $9.50 per option contract.
• At 9:33 a.m., a trader executed a call sweep near the ask of 400 AMC Entertainment options with a strike price of $65 expiring on June 25. The trade represented a $380,000 bullish bet for which the trader paid $9.50 per option contract.
• At 9:33 a.m., a trader executed a call sweep near the ask of 209 AMC Entertainment options with a strike price of $65 expiring on June 25. The trade represented a $198,550 bullish bet for which the trader paid $9.50 per option contract.
• At 9:44 a.m., a trader executed a call sweep near the ask of 200 AMC Entertainment options with a strike price of $40 expiring on June 18. The trade represented a $488,000 bullish bet for which the trader paid $24.40 per option contract.
• At 9:45 a.m., a trader executed a call sweep near the ask of 204 AMC Entertainment options with a strike price of $55 expiring on June 18. The trade represented a $189,720 bullish bet for which the trader paid $9.30 per option contract.
• At 9:57 a.m., a trader executed a call sweep near the ask of 201 AMC Entertainment options with a strike price of $55 expiring on June 18. The trade represented a $180,900 bullish bet for which the trader paid $9 per option contract.
• At 10:34 a.m., a trader executed a call sweep near the ask of 241 AMC Entertainment options with a strike price of $40 expiring on Sept. 17. The trade represented a $831,450 bullish bet for which the trader paid $34.50 per option contract.

AMC Price Action: Shares of AMC Entertainment were trading up 3.8% to $63.03 at publication time.