Avis Budget Stock Swiftly Quadrupled Bears' Money

It took less than five days for put traders to see a massive gain

Digital Content Manager
Apr 18, 2024 at 1:11 PM
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Expiration Week Countdown subscribers just quadrupled their money in less than five days with our Avis Budget Group Inc (NASDAQ:CAR) April 115 put recommendation, which they received on Sunday, April 14. Let's take a look how this trade played out to these bears' advantage.

At the time of our recommendation, shares of the car rental giant were rejected at the 38% Fibonacci retracement of its February downside move, which coincided with the 50-day moving average. Additionally, the security was seeing a breakdown at the 20-day trendline.

Meanwhile, bearish sentiment had not increased since mid-January, with short interest adding 20% during both this time frame amid weak price action. In other words, bears were feeling little-to-no pressure to cover.

Avis Budget Group stock looked ripe for downgrades, too, with six of the eight analysts carrying a “strong buy” recommendation. Implied volatility (IV) on our recommended put was lower than the 20- and 252-day historical volatility (HV) trendlines, and the equity's Schaeffer’s Volatility Scorecard of 78 out of 100 meant it tended to outperform volatility expectations.

This week has brought nothing but hurt for the security, which is now on track for its fifth-straight daily loss while trading at its lowest level since February. This downtrend allowed our subscribers to score a whopping 332% profit they exited their position earlier today.

CAR Intraday

 

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