(AMC), BlackBerry (NASDAQ: BB) – Wall Street continues to bet against AMC stock but looks beyond short selling: report
Wall Street traders turn to a complex bearish options strategy to bet against stocks of AMC Entertainment Holdings Inc (NYSE: AMC) and other stocks or stocks popular with retail investors, Reuters reported Monday.
What happened: Bear put spread is a strategy in which an investor buys one long option with a higher strike price and another short option with a lower strike price. The maximum profit using this strategy is equivalent to the difference between two strike prices minus the net costs associated with the options.
Trade Alert options trading data, analyzed by Reuters, indicates that complex transactions that deploy strategies such as “put spreads” are on the rise.
These trades usually carried out by professional investors accounted for an average of 22% of AMC’s daily trades this week compared to 13% for the month of May.
See also: How to buy AMC shares (AMC)
However, the majority of options trading has historically been done by retail investors, as only around 10-15% of the overall daily AMC options volume this week has been traded in blocks of over 100 contracts, which would be a size linked to professional investors.
Why is this important: Over the past week, AMC shares have risen 83.4%; the stock has climbed 2,160% since the start of the year.
Other stones such as GameStop Corp (NYSE: GME) and BlackBerry Ltd (NYSE: BB) rose 11.87% and 32.67%, respectively, over the same period.
Last week AMC and GameStop short sellers’ losses hit $ 12 billion since the start of the year.
See also: AMC Dizzying Rally took the company’s valuation with a bang on Wednesday ahead of rival Stonk
In AMC alone, year-to-date short sellers losses reached $ 5.22 billion on a market valuation basis.
As a new trading week dawns, BlackBerry and AMC remain the most talked about names on r / WallStreetBets, the Reddit forum known for making short cuts.
Price action: AMC shares on Friday closed nearly 6.7% lower at $ 47.91 and fell 8.7% in the after-hours session at $ 43.74.
Read more : EV Stocks Workhorse, Lordstown Motors Rides Short Squeeze Wave
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