Options Bulls Revisiting Meme Stock Ahead of Earnings

AMC will report first-quarter earnings report on Friday

Deputy Editor
May 1, 2023 at 12:31 PM
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AMC Entertainment Holdings Inc (NYSE:AMC), will step into the earnings confessional for its first-quarter results Friday, May 5, before the market opens. In similar fashion to meme-stock favorite Bed Bath & Beyond (BBBY), options traders have targeted the movie theater operator with renewed vigor like its 2020 all over again.

Put traders are enamored with AMC, per a list of stocks that have attracted the highest weekly options volume over the last two weeks, compiled by Schaeffer's Senior Quantitative Analyst Rocky White. During the last two weeks, 2,597,346 puts changed hands, versus 1,634,766 calls, with the July 4 put standing out as the most popular. 

MAO Chart May 1 2023

The stock has a dismal post-earnings history in the last two years, with just three of AMC's post-report sessions finishing in positive territory. The shares average a next-day return of 8% in the last eight reports, regardless of direction, a number that's slightly smaller than the 9.3% move the options market is pricing in this time around for Friday's trading.  

AMC Entertainment stock was last seen down 1.4% at $5.43, with continued resistance from its 150-day moving average. AMC is up 33.8% in 2023, and, like most meme names, is heavily shorted--over 26% of the stock's total available float is sold short.

AMC Chart May 12023

 

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