"Heavy call buying forces market makers to hedge by purchasing shares, which pushes the price higher, which draws in more momentum traders, which forces more hedging."
"Shares outstanding for CAR stock sit at just 35.26 million, with a float of only 13.05 million shares. That's a thin float."
"The fundamental picture is complicated. Avis Budget Group reported a Q4 FY2025 EPS of -$21.25, a deep miss versus the -$0.23 estimate."
Avis Budget Group's stock increased by 10% today, driven by heavy call buying and short squeeze activity. Hertz also saw an 8% rise, benefiting from similar trading dynamics. Both companies are sector peers with high debt and short interest, making them targets for bullish options flow. Avis Budget Group's stock has risen 118% over the past month, fueled by a feedback loop of call buying and market maker hedging. Despite this surge, the company reported a significant EPS miss and carries substantial debt.
Read at 24/7 Wall St.
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