Citadel Holding Nearly $500 Million in AMC Options

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

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4 thoughts on “Citadel Holding Nearly $500 Million in AMC Options”

  1. Question who sold so many call options? What strike and expiry..this looks like they sold a whole lot of options to themselves via a different name to be able to justify their continued shorting

    Like

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