Sinking AER Stock Sees Explosion of Options Bears

AerCap's short interest has ballooned in recent weeks

Lillian Currens
Apr 1, 2020 at 12:09 PM
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Independent aircraft leasing name AerCap Holdings N.V. (NYSE:AER) hasn't been immune to the devastating effects the coronavirus has had on the flight space. The stock has been limping along with most of its sector peers, down 10.3% at $20.40 today, with any hope of a rebound now completely snuffed out. The stock is now down over 66% this year, and while many investors are undoubtedly mourning these massive losses, options bears are taking this time to target AER in a big way.

In fact, put volume is running in the 100th percentile of its annual range, with 31,000 puts across the tape so far -- 14 times what's typically seen at this point -- compared to just 210 calls. Most popular by far are the July 20 and 10 puts -- making up a majority of the contracts traded so far today -- with positions being opened at both. 

This influx of options bears is out of the norm for AER, which saw just 384 puts exchange hands in the past 10 days, compared to 1,537 calls. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.86, sits lower than all other readings from the past year, suggesting short-term option players haven't been more call-biased in the past 12 months. 

Short interest, on the other hand, has climbed at an alarming rate, up 121.2% in the last two reporting periods. The 2.59 million shares sold short only make up a slim 2% of AER's available float, however, and would take less than three days to cover at AerCap's average pace of trading. It is worth noting, though, that AER landed itself on the short-sale restricted (SSR) list today. 


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