This means that option dealers have inevitably sold calls on AMC. Judging from the elevated IV of AMC calls, we can interpolate that a lot of call options are currently being bought. However, this practice can generate huge feedback loops, given the existence of sufficient imbalance. Option dealers usually gamma hedge their exposure in order to minimize risks. Is a Gamma Squeeze Imminent?Īs a refresher, the delta of an option measures the rate at which the price of that option changes with the underlying stock. A gamma squeeze, on the other hand, is another matter entirely. However, hedging via options has made this eventuality quite rare. This should also contribute toward the cheapening of the IV around puts, as can be seen in the snippet above.Ī classical short squeeze occurs when a stock's short interest declines in tandem with a dramatic increase in its price, as short-sellers are compelled to close their positions by buying back shares. Given the high premiums that the calls currently command, we would hazard a guess that a lot of hedging is currently taking place by selling puts. AMC short-sellers can still hedge their short position by either buying call options or selling puts. In fact, over the past weekend, Aron opened a twitter poll for a new NFT, titled “ There’s Gold in Them Thar Hills” to celebrate the recent influx of liquidity in the troubled mining company.ĭoes this mean that a short squeeze in AMC shares is imminent? Not so fast. Moreover, with Hycroft shares up a whopping 274 percent so far in 2022, AMC Entertainment's CEO, Adam Aron, recently communicated the theater chain's willingness to pursue similar unorthodox investments, paving the way for the current bull run in AMC shares. By investing just 2.6 percent of its unrestricted cash balance of $1.59 billion (as of the end of 2021) in Hycroft, AMC seems to have bought a very cheap call option on metallic gold, which is expected to reach $2,500 per ounce by the end of 2022, as per a tabulation by Goldman Sachs. Riley Securities, which allows the company the opportunity to sell $500 million worth of common shares via periodic offerings.Īs per an initial assessment conducted in 2022, Hycroft currently owns over 15 million ounces of minable gold and 596.4 million ounces of minable silver spread over 72,000 acres in Nevada. To wit, AMC has now invested $27.9 million in Hycroft, thereby opening the doors to a further investment of $527.9 million from the likes of Eric Sprott as well as an At Market Issuance Sales Agreement with B. Nonetheless, AMC Entertainment's acquisition of a 22 percent stake in the troubled gold miner, Hycroft Mining Holding Corporation ( NASDAQ:HYMC), seems to be acting as the most potent tailwind currently. Moreover, the company continues to launch commemorative NFTs around the release of blockbuster movies. Back in December 2021, it announced 'I Own AMC' NFTs on the WAX blockchain exclusively for the company's shareholders, entailing various discounts and a host of other benefits. It also surpassed non-GAAP EPS estimates by $0.14, reporting an adjusted bottom-line metric of -$0.11.Īs a part of its turnaround campaign, AMC is also tapping into the new gold rush of sorts in NFTs. Meanwhile, the top 5 stocks on Dusaniwksy’s list were those of Faraday Future Intelligent Electric Inc.Dissecting the Tailwind Behind AMC Entertainment (NYSE: AMC) SharesĪMC Entertainment reported quite strong Q4 2021 earnings recently, beating revenue estimates by $57.43 million to report a top-line quarterly metric of $1.17 billion. Read more: AMC may have been a meme-stock darling, but weakness in some key areas has the company on shaky ground. “The higher chance that short sellers may be forced to buy-to-cover will only help push stock prices even higher - and making the squeeze even tighter for the shorts still in the stock.”ĪMC, which had about $1.50 billion in short interest still open as of Monday’s close, was 16th on Dusaniwsky’s list, and GameStop, with $1.92 billion in short interest, was 24th.Īlso read: Short sellers raise bets against GameStop and AMC to highest level in a year as Wall Street sees more pain ahead. “he chances of getting a tap on the shoulder from a Chief Risk Officer to cut losses and get out of a trade is higher for these stocks,” Dusaniwsky wrote. Over the past month, AMC’s stock has soared 37.0% and GameStop shares have hiked up 16.5%, while the S&P 500 index He said an additional variable that makes a stock “squeezable” is substantial net-of-financing mark-to-market losses.

Amc stock short squeeze