Matt_ORATS
Sponsor
No. An implied borrow that is high is when the puts are bid to the point where put call parity needs to be adjusted by the interest rate to make parity.
Was CAR...Avis Budget a short squeeze today??
- Thread starter Cabin111
- Start date
I love how so many people on here said this WASN'T a short squeeze. You were wrong!! I was right...But of course I optioned my shares away!! Live and learn...
My option money was very rich for a reason...
Avis Surge Blasts Short Sellers With Billions in Losses, S3 Says
(Bloomberg) -- Investors betting against rental-car company Avis Budget Group Inc. are facing about $4.3 billion in losses after the company’s shares more than tripled.
Its shares gained as much as 218% at one point Tuesday amid a flurry of trading activity after the rental car company said it will play a big role in the increased adoption of electric cars in the U.S. When the stock was up roughly 181%, the surge pushed mark-to-market losses for short-sellers on the day to $4.29 billion, according to S3 Partners data.
The stock is likely to remain a target for a short squeeze with the potential for new investors betting against the company stepping in, Ihor Dusaniwsky, S3 Partners’ managing director of predictive analytics, said by email. “So there may be a game of musical chairs in Avis today, some shorts leaving the game, but other shorts just switching seats with other players.”
Bearish bets against the company have jumped in recent months with roughly one-fifth of shares available for trading currently sold short, according to S3 data. That compares to data from IHS Markit which shows the short interest has peeled back to roughly 17% from a mid-September high of 23%.
Day's Range 173.00 - 545.11
52 Week Range 28.20 - 545.11
My option money was very rich for a reason...
Avis Surge Blasts Short Sellers With Billions in Losses, S3 Says
(Bloomberg) -- Investors betting against rental-car company Avis Budget Group Inc. are facing about $4.3 billion in losses after the company’s shares more than tripled.
Its shares gained as much as 218% at one point Tuesday amid a flurry of trading activity after the rental car company said it will play a big role in the increased adoption of electric cars in the U.S. When the stock was up roughly 181%, the surge pushed mark-to-market losses for short-sellers on the day to $4.29 billion, according to S3 Partners data.
The stock is likely to remain a target for a short squeeze with the potential for new investors betting against the company stepping in, Ihor Dusaniwsky, S3 Partners’ managing director of predictive analytics, said by email. “So there may be a game of musical chairs in Avis today, some shorts leaving the game, but other shorts just switching seats with other players.”
Bearish bets against the company have jumped in recent months with roughly one-fifth of shares available for trading currently sold short, according to S3 data. That compares to data from IHS Markit which shows the short interest has peeled back to roughly 17% from a mid-September high of 23%.
Day's Range 173.00 - 545.11
52 Week Range 28.20 - 545.11
I don't trust those short squeeze reports
written by professional writers even if the reports are from a reputable website.
just focus on the charts and that should suffice.
Between the end of Sept 2021 and 1 Nov 2021,
no wise investors/traders were foolish enough to short CAR
as CAR was obviously bullish.
on 2 Nov 21, wise traders might have shorted CAR.
I normally read those reports for entertainment purposes.
anyway, have a happy day reading those reports.
Last edited:
@maxinger, more expressive is the "Short % of Float" value of the stock statistics, for example here:
https://finance.yahoo.com/quote/CAR/key-statistics?p=CAR.
The higher this value the higher the possibility of short squeeze.
One better should archive such numbers (ie. all data belonging to a stock) daily, for research and for drawing charts to visually see the development over a time frame...
https://finance.yahoo.com/quote/CAR/key-statistics?p=CAR.
The higher this value the higher the possibility of short squeeze.
One better should archive such numbers (ie. all data belonging to a stock) daily, for research and for drawing charts to visually see the development over a time frame...
Last edited:
Matt_ORATS
Sponsor
I thought this was an interesting trade.
On another thread, I introduced a backtest of an earnings trading strategy entering long/short calendars and long/short straddles the day before announcement and exiting the day after.
One of the signals was CAR LongCalendar as below. I am testing this strategy so I put on one lots on a few to test out slippage and how well the test is tracking the report results.
I thought the calendar would get killed with the large move. However, the IV went up so much the long side swamped the short and the trade made 4.91% notional as below.
The report shows a long calendar using straddles. I put on a call calendar and had similar results. If there is interest, I can show more about how this strategy works.
On another thread, I introduced a backtest of an earnings trading strategy entering long/short calendars and long/short straddles the day before announcement and exiting the day after.
One of the signals was CAR LongCalendar as below. I am testing this strategy so I put on one lots on a few to test out slippage and how well the test is tracking the report results.
I thought the calendar would get killed with the large move. However, the IV went up so much the long side swamped the short and the trade made 4.91% notional as below.
The report shows a long calendar using straddles. I put on a call calendar and had similar results. If there is interest, I can show more about how this strategy works.
I'm confused b/c of this news article:
"Tesla drops after Musk tweets that 'no contract has been signed' with Hertz"
https://finance.yahoo.com/news/tesl...act-has-been-signed-with-hertz-145626183.html
I was under the impression that it was Avis (ticker CAR) that ordered the 100,000 cars from Tesla,
and b/c of this the CAR stock rose 108%...
But the above article says it was Hertz, not Avis.
Anybody can shed a light on these issues, ie. summarize what really happened? Thx
Oh, btw, @Matt_ORATS, in your posting above you talk of an "announcement day". What announcement is it (or was it)? And what's the link to the other thread you mention? Thx.
"Tesla drops after Musk tweets that 'no contract has been signed' with Hertz"
https://finance.yahoo.com/news/tesl...act-has-been-signed-with-hertz-145626183.html
I was under the impression that it was Avis (ticker CAR) that ordered the 100,000 cars from Tesla,
and b/c of this the CAR stock rose 108%...
But the above article says it was Hertz, not Avis.
Anybody can shed a light on these issues, ie. summarize what really happened? Thx
Oh, btw, @Matt_ORATS, in your posting above you talk of an "announcement day". What announcement is it (or was it)? And what's the link to the other thread you mention? Thx.
Last edited:
Hertz is getting the Teslas, not Avis.
https://www.cnbc.com/2021/11/02/her...arted-delivering-cars-despite-musk-tweet.html
Hertz says Tesla’s already started delivering cars even though Musk says there’s no signed deal yet
PUBLISHED TUE, NOV 2 20219:55 AM EDTUPDATED TUE, NOV 2 20218:37 PM EDT
Michael Wayland@MIKEWAYLAND
Lora Kolodny@LORAKOLODNY
SHARE
KEY POINTS
In this article
- Hertz says deliveries of Tesla cars into its rental fleet are already occurring, despite a tweet Monday night by Tesla CEO Elon Musk that the automaker has not signed a contract with the company.
- Musk on Twitter Monday night said he’d like to “emphasize that no contract has been signed yet.”
- A Hertz spokesperson declined to discuss specific details of the agreement, but said the company remains “on plan” to offer the vehicles by the end of 2022.
WATCH NOW
VIDEO03:43
Hertz deal with Tesla in question after Musk tweet
Hertz says Tesla has already started delivering cars into its rental fleet, even though Tesla CEO Elon Musk tweeted Monday night that the automaker hasn’t yet signed a contract with the company.
Musk on Twitter said he’d like to “emphasize that no contract has been signed yet.” He also said the “Hertz deal has zero effect” on the automaker’s economics, as it will “only sell cars to Hertz for the same margin as to consumers.”
Lauren Luster, director of communications at Hertz, declined to discuss specific details of the agreement, but said the company remains “on plan” with its announcement last week to offer 100,000 Tesla electric vehicles by the end of 2022.
“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations,” she said in an emailed statement. “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”
Shares of Hertz during trading Tuesday morning reached a new 52-week high of $46 a share, up 35%. Tesla’s stock was slightly down to less than $1,175 a share.
Tesla Model 3 electric vehicles at a Hertz airport location.
Photo by E.R. Davidson
Tesla did not immediately respond for comment.
Investors have traditionally frowned upon automakers when they sell large amounts of vehicles to daily rental fleets. That’s because cars and trucks sold to rental companies are usually done so at a discount, with such deals used to reduce bloating inventories and increase their total vehicle deliveries.
Tesla hit a $1 trillion market cap for the first time a week ago after Hertz announced it would grow its fleet of battery-electric vehicles with “an initial order of 100,000 Teslas by the end of 2022.”
Interim Hertz CEO Mark Fields last week said the rental company started talking with Tesla “many months ago” about the purchase of the vehicles. He described it as a “great relationship” and part of Hertz’s move to lead rental companies in managing large fleets of EVs.
A commercial featuring seven-time Super Bowl champion Tom Brady, alongside parked Tesla Model 3 electric sedans in a Hertz garage, accompanied the announcement.
Two days after announcing the initial order of 100,000 Teslas, Hertz said it would make up to half of the cars available to Uber drivers to rent by 2023. The company said “if successful,” the program could expand to 150,000 vehicles over the next three years.
Hertz “pointed out that these ambitions could be affected by factors outside of its control, such as semiconductor chip shortages or other constraints.”
During the burgeoning coronavirus pandemic, Hertz filed for bankruptcy protection — but as travel rebounded somewhat and demand for rental vehicles picked up, investors from Knighthead Capital Management and Certares Management said they would take over the company.
Regarding Avis,
https://markets.businessinsider.com...e-short-squeeze-elon-musk-hertz-tweet-2021-11
Avis soars 212% as investors pile in following Elon Musk's tweet casting doubt over Hertz deal, strong earnings, and a possible short-squeeze
Matthew Fox
Nov. 2, 2021, 11:29 AM
Avis.
Jeffrey Greenberg/Universal Images Group via Getty Images
Avis Budget Group soared to record highs on Tuesday, jumping as much as 212% as a short-squeeze took over the stock.
- Avis Budget Group soared as much as 212% on Tuesday as a potential short-squeeze hit the stock.
- The car rental firm has more than 20% of its share float shorted, according to data from Koyfin.
- Catalysts helping boost the stock on Tuesday include strong Q3 earnings and a tweet from Elon Musk casting doubt over Tesla's deal with Hertz.
The car rental company has just over 20% of its shares shorted, according to data from Koyfin. With the stock at all-time-highs, that means every short position is underwater. And given Tuesday's market value gain of more than $25 billion, the shorts are already down billions of dollars.
Avis is a popular short with institutional investors that employ a pair-trading strategy, meaning while they're betting against the stock, they're also long shares of Hertz, a competing car rental company. Hertz only has a short interest of 0.5%.
Catalysts boosting Avis stock on Tuesday include strong third-quarter earnings and a tweet from Elon Musk casting doubt over Tesla's deal to provide Hertz with 100,000 electric vehicles.
"I'd like to emphasize that no contract has been signed yet. Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics," Musk tweeted late Monday.
On Tuesday, Hertz told CNBC that Tesla deliveries have already started.
Meanwhile, Avis Rental's third-quarter earnings report showed a near 100% year-over-year jump in revenue as travel rebounds post-pandemic, and adjusted EPS of $10.74, beating analyst estimates by $4.06.
The company added that current utilization rates means it is well prepared to service an expected surge in demand amid the upcoming holiday travel season.
Shares are on a tear, rising 1,334% year-to-date. Avis stock experienced several volatility halts in Tuesday's trading session.
Markets Insider
In my view, there is something inherently awry about this idea. I mean, any rental car company that is going to buy all these electric cars better have a plan in place for how these cars are going to get recharged once they leave their facility by renters.
What happens when renters run the car out of juice when on vacation, take a cab to the airport and leave? There will have to be a fleet of battery-charging trucks running around to charge these cars to enough power to get them back to the rental agency. That's a lot of cost, no?
What happens when renters run the car out of juice when on vacation, take a cab to the airport and leave? There will have to be a fleet of battery-charging trucks running around to charge these cars to enough power to get them back to the rental agency. That's a lot of cost, no?