AMC jumps as options volume surges after record movie weekend

AMC Entertainment shares rallied Monday, putting one of the market’s best-known retail-trader stocks back on investors’ screens. The move matters because it came with a sharp jump in options activity, a market signal that traders were paying up for short-term exposure after a strong weekend at the box office.

AMC was recently up 25.59% at $2.44, according to CNBC market data from 2:07 p.m. ET. CNBC reported that more than 300,000 AMC options contracts had changed hands Monday, nearly five times the stock’s 30-day average and enough to rank AMC among the 20 busiest stocks in the market by options volume.

The activity leaned toward calls, CNBC reported. A call option gives the buyer the right, but not the obligation, to buy a stock at a set price, known as the strike price, before a set expiration date. Traders bought almost 100,000 call contracts, compared with 62,000 calls sold and fewer than 10,000 puts bought. A put option gives the buyer the right to sell at a set price, so lower put demand can suggest less interest in protection against a drop.

The stock and options move followed two catalysts: record box office performance for Christopher Nolan’s “The Odyssey” and AMC earnings that CNBC said beat analyst expectations while showing double-digit revenue growth.

AMC CEO Adam Aron told CNBC’s “Squawk Box” that “America’s fascinated with The Odyssey this weekend.” Aron also said AMC theaters drew 4.3 million guests worldwide over the weekend.

Options can amplify attention around a stock because small moves in the share price can change the value of short-dated contracts quickly. CNBC reported that more than $6 million in AMC options premium traded Monday, with $5.5 million tied to calls. Premium is the amount buyers pay for an options contract.

The most active AMC contracts by dollars traded were the $2 and $2.50 strike calls expiring Aug. 21, CNBC reported, priced at 39 cents and 20 cents, respectively. By contract volume, the busiest trade was the $3 strike call with the same expiration date. CNBC said that contract would require AMC shares to rise 34% for the buyer to break even.

Monday’s rally extended a nearly four-month climb that has taken AMC shares up just under 150%, according to CNBC. That rebound still leaves the stock far below its pandemic-era peak. CNBC reported that AMC remains down 99% from its 2021 all-time high above $700, when the company became a major retail-trading favorite and options activity helped drive swings in the underlying shares.

Aron framed the weekend as part of a broader recovery for theaters after the pandemic disrupted moviegoing. “As a result of Covid there was a lot of experimentation but what Hollywood has learned over the last several years is people love to go to movie theaters,” he told CNBC. “Studio after studio is turning out movie after movie designed for the big screen.”

CNBC also noted that Imax shares, up 37% over the past year, saw some call-option activity Monday, though its trading was far lighter than AMC’s.

This story draws on original reporting from CNBC.