Call Traders Blast Struggling Hertz Stock

Call options are running at four times their usual rate today

Assistant Editor
Sep 22, 2020 at 10:30 AM
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The shares of Hertz Global Holdings Inc (NYSE:HTZ) are up 3.9% at $1.33 at last check, amid news that the company is weighing two different options for a bankruptcy loan, according to a report from Bloomberg. HTZ has been trading firmly in the penny stock region since June, struggling since its coronavirus-induced bear gap. Year-to-date, the equity remains down 91.6%, and so far today has run out of steam at its 10-day moving average, a trendline it hasn't closed above since late August. 

Analysts are hesitant toward HTZ, with three out of the four in coverage carrying a "hold" rating, and the remaining at a "sell." Meanwhile, the 12-month consensus price target of $20 is a whopping 1,409.4% premium to current levels.

Though short interest has begun to fall from its recent spike, the 28.5 million shares sold short still account for 18.2% of the stock's available float. In other words, it would take over two days to buy back these bearish bets at HTZ's average pace of trading. It's also worth noting that the recent unwinding of short interest hasn't done much to push the stock higher, a sign of a technical weakness. 

Today, the options pits are swarming with bullish activity. So far, 4,859 calls have crossed the tape -- four times what's typically seen at this point. Most popular by far is the January 4.5 call, followed by the 2-strike call in the same series. 

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