AMC entertainment (AMC) – Get report It was moderately higher Monday ahead of what is expected to be another volatile week of trading at the meme-stock-poster-child theater chain as Wall Street traders bet against another massive rally fueled by retail investors.
AMC shares rose 11.9% to $ 53.61 after Reuters reported that Wall Street traders and investors are betting on the options market that would limit losses if retail traders continue their collective effort to boost stocks. AMC stocks and other meme stocks on the rise.
A Reuters analysis of options data and interviews with market participants, including a Wall Street banker and a fund manager with $ 30 billion in assets, showed that some institutional investors have increased complex options trading that allows them to bet. that stocks will fall.
The so-called bearish spread, a common bearish options strategy among more sophisticated Wall Street investors and traders that also limits earnings, comes as AMC continues to post surprising gains amid a frenzy of less sophisticated retail investor-driven buying. for little more than the promise that the stock will increase in value.
In fact, AMC has taken over the spotlight for meme stocks that video game retailer GameStop once had. (GME) – Get report, which became a household name in January when its stock soared amid conversations among retail investors on forums like Reddit to bid higher on the stock.
In the case of the bearish spread, its higher use now, which has not been previously reported, shows how Wall Street is looking for ways to profit from the unprecedented rise in retail, but cautiously after some high-profile funds were beaten. at the beginning of this year.
On the brink of bankruptcy just a few months ago, AMC is now the darling of retail traders, with a 2,200% gain this year ranked as the most stocks in the Russell 3000 index. Rising stocks have allowed the company will sell shares and shore up its shaky balance sheet.
AMC shares ended Friday down nearly 7%, even as CEO Adam Aron defended another round of capital raising that many see as a dilution of the shares.
Aron himself has responded to that, noting that the additional 12 million shares AMC is looking to sell “… is not a pointless dilution” but rather a “… very smart cash raising so we can grow this company”.
AMC shares are up nearly 2,600% so far this year.
Meanwhile, the granddaddy of Meme’s stock, GameStop, is expected to report a 70-cent-a-share quarterly loss on sales of $ 1.2 billion when it reports earnings on Wednesday. At the latest check, GameStop shares rose 4.23% to $ 260.11.
GameStop is up over 1,400% to date.