Asymmetric warfare. Absence for the first time in a while. Fierce loyalty. Of course, many people associate these themes with Christopher Nolan’s The Odyssey, but they can also fit neatly into the never-ending saga of AMC and its army of “monkey” traders.
AMC Options have exploded this morning, with over 300,000 contracts traded at the time of writing, nearly five times the 30-day average, making it one of the top 20 stocks in the overall market by options trading volume. Following the film’s box office success, flows were very bullish, with almost 100,000 calls bought compared to 62,000 calls sold and fewer than 10,000 puts bought.
In addition to the record-breaking “Odyssey,” AMC today reported earnings that exceeded analyst expectations and showed double-digit revenue growth.
“America is captivated by ‘The Odyssey’ this weekend,” AMC CEO Adam Aron said on CNBC’s “Squawk Box” this morning. AMC theaters attracted 4.3 million viewers worldwide over the weekend, Aaron added.
AMC 5 day chart
Monday’s rally gave AMC stock its first gain in nearly four months, sending it up just under 150%. But this is far from a going-home party for the bulls who have held the stock up since its heyday as a retail “meme” darling since the coronavirus. The stock is still down 99% from its all-time high of over $700 in 2021. Of course, the options market plays a key role in the meme stock mania, often leading AMC’s underlying stock.
The option premium exchanged Monday was more than $6 million, and the call contract involved $5.5 million.
The most popular option contracts by value were a two-strike call and a 2.5-strike call expiring on August 21st, priced at 39 cents and 20 cents, respectively. The most popular trade based on volume is a three-strike call of the same expiration, which requires a 34% rally to breakeven.
Traders looking to spend more on premium may want to take a look at Imax, which is up 37% in the last year. Call options are currently showing some activity, but not as busy as AMC trading.
“COVID has led to a lot of experimentation, but what Hollywood has learned over the last few years is that people love going to movie theaters,” Aaron said in an interview. “Studio after studio is bringing out movies designed for the big screen.”
