Calls Still Hot on Struggling Hertz Stock

The company plans on selling $1 billion in potentially "worthless" stock

Deputy Editor
Jun 15, 2020 at 12:57 PM
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Listed below are 20 stocks that have attracted the highest weekly options volume over the last 10 trading days thanks to data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White -- who also highlighted new entrants in yellow. Standing out this week is Hertz Global Holdings Inc (NYSE:HTZ), after a bankruptcy court last Friday allowed the company to sell up to $1 billion in potentially "worthless" stock. This move is designed to capitalize on the stock's recent rally, driven by traders defying conventional trading practices, and helped HTZ log a Friday gain of 37.3%. Below, we'll take a closer look at the options activity surrounding HTZ and break down this recent rally (and subsequent pullback).

Most Active Options June 15

 

Looking at White's data, over the past 10 days, 684,426 calls and 511,272 puts have exchanged hands. It looks like calls have been especially popular of late, per SPCE's 50-day call/put volume ratio of 1.31 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 72nd percentile of its annual range. Today's trading leans bullish too, with 90,000 calls across the tape so far, compared to 82,000 puts that have exchanged hands. The two most popular contracts today are the June 1 put and the 3 call. 

Last time we checked in on HTZ, the stock was trading at a new record low amid reports the company entered into forbearance. Things got worse from there, though the stock did enjoy an eyebrow-raising spike toward the $6 level, notching a 157% weekly win in early June. This surge was short-lived though, and today, HTZ extending these losses, down 20.3% at $2.26, at last check.

Analysts meanwhile, still aren't convinced, with all four in coverage calling HTZ a "hold" or worse, though it's worth noting that short sellers are falling off the bearish bandwagon. Short interest is down 23.7% in the last reporting period. Despite this, the 50.49 million shares sold short still represent a staggering 35.7% of the stock's available float.   

 

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