Despite losses of over $1 billion last month, short sellers remain attracted to AMC like moths to a flame:

Investors shorting “meme stock” AMC Entertainment Holdings (AMC.N) are estimated to have lost about $512 million on Monday after a rally that sent the cinema operator’s shares up more than 15%, data from financial analytics firm Ortex showed.

They are up against staggering volume from retail traders, among others:

Recent reports from brokerages Fidelity and Freetrade show AMC has been the most traded stock by their customers, many of whom are small-time investors.

More here.

These losses by short sellers likely understate the total losses by AMC bears. Many have taken option positions that benefit if AMC’s price drops. Those positions are going sour rapidly, leading one hedge fund to lose approximately $400 million earlier this month.

There are other strategies AMC skeptics could adopt, like buying puts (limited downside) rather than selling calls (unlimited downside). Or, they could buy credit default swaps on AMC’s bonds.

But AMC’s volume is more than double that of any other stock today and a substantial percentage of shares are still sold short, making another short squeeze a possibility. The safest spot for bears is on the sidelines.

More on AMC:

• Hedge Fund Torched By AMC
• AMC Share Sales: a Wise Move for the Company’s Future
• Wall Street Has a New Tactic in the Fight Against AMC: Options

Photo: “Burn Money” by purpleslog is licensed under CC BY 2.0

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

Save Money on Stuff I Use:

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. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

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. I’ll also get $10.