In A Squeeze Made For The Big Screens, AMC Entertainment Options Traders Place Huge Bets

AMC Entertainment Holdings Inc AMC opened 5.18% lower on Thursday, but the stock was immediately bought and a massive amount of institutions began placing call orders.

By midday, the amount of options orders stood in the hundreds, with millions of dollars being bet that AMC is in the midst of a colossal short squeeze.

By Thursday afternoon, AMC’s stock was trading up over 44% and over a resistance level at $20.36.

The resistance level was made back on Jan. 27 when AMC, GameStop Corporation GME and dozens of other stocks were the target of a short squeeze. AMC is now trading at its highest price since October 2018.

The calls being placed had strikes ranging up to the $40 level, which echoed Wednesday’s options trades, and with some institutions placing almost $300,000 on a single order. A number of institutions also paid above the asking price for their calls.

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.

See Also: GameStop, AMC Short Seller Losses For 2021 Widen To $8B

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

At 10:40 a.m., a trader executed a call sweep near the ask of 470 AMC Entertainment options with a strike price of $25 expiring on June 18. The trade represented a $227,950 bullish bet for which the trader paid $4.85 per option contract.

At 10:50 a.m., a trader executed a call sweep near the ask of 943 AMC Entertainment options with a strike price of $40 expiring on June 18. The trade represented a $197,087 bullish bet for which the trader paid $2.09 per option contract.

At 11:12 a.m., a trader executed a call sweep near the ask of 267 AMC Entertainment options with a strike price of $12.50 expiring on May 28. The trade represented a $285,690 bullish bet for which the trader paid $10.70 per option contract.

At 11:21 a.m., a trader executed a call sweep near the ask of 319 AMC Entertainment options with a strike price of $40 expiring on Sept. 17. The trade represented a $172,260 bullish bet for which the trader paid $5.40 per option contract.

At 11:26 a.m., a trader executed a call sweep near the ask of 405 AMC Entertainment options with a strike price of $40 expiring on June 18. The trade represented a $101,250 bullish bet for which the trader paid $2.50 per option contract.

AMC Price Action: Shares of AMC Entertainment were trading 41.08% higher at $27.60 at last check Thursday.

Photo courtesy of AMC.