Call Traders Target Sinking AMC Stock After Earnings

Call volume is picking up after the results

Deputy Editor
Mar 1, 2023 at 10:07 AM
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The shares of AMC Entertainment Holdings Inc (NYSE:AMC) are down 5% to trade at $6.79 this morning, after the movie theater company posted lower-than-expected fourth-quarter losses.

AMC reported quarterly losses of 26 cents per share on revenue of $990.90 million, the latter of which beat analysts' estimates. The results seem to confirm that theater-going will remain below pre-pandemic levels, as rising inflation impacts discretionary spending. Analysts at Wedbush predicted 2023 box office to be down 24% from 2019 levels.

Call traders are undeterred. Within the first half hour of trading, more than 76,000 calls have crossed the tape, volume that's double the intraday average amount. Most popular is the weekly 3/3 6.50-strike put, followed by the 7.00-strike call from the same series. 

Longer term, options traders have been unusually bearish. This is per AMC's Schaeffer's put/call open interest ratio (SOIR) of 2.06, which sits higher than 91% of annual readings and implies a put-bias amongst short-term options traders.

On the charts, AMC stock is set to close back below its 140-day moving average, after toppling the long-term ceiling to start the week. Year-to-date, the meme stock stands more than 64% higher, but sports a 40.5% year-over-year deficit.

 
 

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