Hedge fund Citadel LLC is holding nearly $500 million in options on AMC Entertainment Holdings, Inc., per the fund’s latest SEC filing.

Citadel’s position consists of $191 million in puts and $272 million in call options, along with a small position in common stock. This massive position has not been reported elsewhere, to my knowledge.

Citadel’s position indicates they may be executing a “long straddle” strategy. This strategy involves buying put and call options on the same stock.

If the stock drops, you profit. If it jumps, you profit too.

But there’s a catch:

The risk of the long straddle is that the underlying asset doesn’t move at all.

AMC’s meme stock investors are generally dedicated to holding for the long term. That provides a stable source of demand for the shares.

If AMC shares don’t move, Citadel could suffer substantial losses.

We’ll see who wins this test of wills.

More on markets:

CITADEL SUPPRESSING CRITICS WITH LEGAL ACTION

ROBINHOOD VS. INTERACTIVE BROKERS: SMACKDOWN!

CITADEL SUES TO CRUSH COMPETITORS

Photo: Citadel LLC CEO Kenneth Griffin

If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order.