AMC Entertainment Holdings Inc. (NYSE:AMC) will take its turn in the earnings confessional after the close tomorrow, June 9, posting its first-quarter results. The stock is getting a broad-market boost ahead of the event, up 8.8% to trade at $6.42 at last check, set to close atop the 150-day moving average for the first time in over a year.
Since we last covered AMC in mid-May, reports that Amazon had plans to buy the movie theater sent the equity surging, though this one-day rally was quickly capped by the aforementioned 150-day. This pullback was caught by its 70-day moving average, which provided a springboard for this month's surge. Regardless, the stock still suffers an 11.7% year-to-date deficit.
Looking back at the past two years, just three of AMC's post-earnings sessions finished positive. The security averaged a next-day return of 6.5%, regardless of direction, which is much smaller than the 21.1% move the options market is pricing in this time around.
A look at today's trading shows volume running at a slightly quicker clip than what's normally seen, with 33,000 calls and 29,000 puts across the tape in the last hour of trading. Most popular are the weekly 6/12 5- and 6-strike puts, with positions being opened at both.
A preference for puts has been the norm of late, with 1.36 puts picked up for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the last 50 days. This ratio sits in the 85th percentile of its annual range, suggesting a healthier-than-usual appetite for these bearish bets.