Avis Budget Group Options Rocket Over 28,000%: What Investors Should Know

One of the most talked-about stocks during Tuesday’s trading session was Avis Budget Group Inc. CAR. Investors who bought in early on the stock Tuesday saw shares surge. Options traders fared even better.

What Happened: Rental car company Avis reported earnings per share of $10.74 for the third quarter, beating the consensus street estimate by more than $4. The company also announced it was adding an additional $1 billion to its share buyback.

Shares saw a potential short squeeze Tuesday with a reported 28.8% of the float short and shares quickly traded at a triple-digit increase over Monday’s closing price.

Shares of Avis Budget traded between $173 and $545.11 during Tuesday’s trading session. Shares closed at $357.17, up 108.31% for the trading session.

Related Link: Avis Stock Pulls Back After Gaining 200% On Earnings, Short Squeeze 

Options Traders: Investors or traders who bought call options of CAR may have fared better with returns topping out in the thousands and tens of thousands of percentage gains Tuesday.

The highest-priced call option for CAR with a Nov. 19 strike date was $260. Investors poured into this option, which traded between $0.40 and $300.80 during Tuesday’s trading session.

The calls ended the day up 10,756% to $117.25. Earlier in the day, the options were up more than 28,000% as investors bet on continued volatility in Avis Budget and a potential future short squeeze happening again.

Investors will wait and see if a new options chain is added with higher strike prices offered in the future given the new highs set by CAR shares Tuesday. 

Photo: Avis Budget Group