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Avis Budget and A Short Squeeze Plus Hertz Getting Dragged Into The Action

Hertz Global is on a terror. . Stocks in the $5.00 range sometimes do that. Yet really it's the Avis Budget short squeeze that is causing this stir. Look at how it jumped just over $105.00 dollars today. How often do you see a chart like this? It's a short squeeze and the stock is trading on high daily volumes. At one point this morning (a Tuesday) there was a "stop trading" on it. Trading options on it defies logic as they are so expensive. Look at this one example. These are the 700 series of Calls and the stock is only trading at 11:17 a.m. at $665.00. In other words they are $35.000 "out-of-the-money". Look at how crazy expensive they are. The stock would have to jump $105.00 or one hundred and five dollars by the end of the week just to break even! Who would be crazy enough to make such a bet? Day traders would be because they are banking on the effects caused by the stocks interday momentum. Let me explain this better by showing you an end of day re...
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Ford Always Piggybacks G.M.'s Earning Reports

Look out. Option players can get whipsawed. A good earnings report can turn out to be a bad earnings report. If you have time read this.
Here is how G.M. traded yesterday after the release of their quarterly earnings report.
A heathy earnings report and the stock sold off in price. Now these two readouts.
With the stock closing at $50.02 cents might it rebound on the morning after? Now look at this.
These options in the first hour of trading don't know what they want to do and they still have a few days life left in them. Ford has an earnings report coming out Feb. 5th. The results of G.M. large cash flows might tweak the interest in owing Ford Calls. Folks this is real time action where trading decisions abound. Here is a 10:03 a.m. printout of how G.M. is trading on the day.
The stock is doing nothing. Let's look now at the Ford short options knowing their earning report is coming out in a few days. .
Here is it's five day chart. It sold off yesterday in sympathy with G.M.'s decline.
What do I think is going to happen? The tariff talks are a big scare and options on $50.00 priced stocks do not swing as much as options on stocks that cost double or triple that amount. Yet the real point of this blog is to point out that this piggyback type of action of Ford and G.M. happens four times a year. It's now 3:17 p.m., a few hours after this first posting. G.M. makes cars and trucks in both Canada and Mexico. Trump is talking tariffs this weekend. Will this become a new reality which might start to weigh in and push the price of both of these stocks down? G.M. isn't rebounding.
.Now this.
. Now the Jan 30th opening for the 50 series G.M. Calls. These are dangerous options to be in with time running out and the clock ticking as to why the tariffs might be imposed. I would just bail on them and step aside from trying to play Ford for the upside.
I actually like options on higher priced stock better which often swing more or options on stocks in the $10.00 range. Now this. A look at the G.M. chart for the day.
Here are the 50 series of Calls at the end of the day.
G.M. ended up closing out the week (Jan 30th) at $49.43. After following this action all week waiting for an upward rebound the stock fizzled out. Now let's look ahead to February 4th which is a Tuesday. As we can see G.M. is still caught up in tariff worries.
The new question is the one of will Ford stock now suprise? None of this is a walk in the park. With earning coming out after the closing bell tomorrow here is the Feb 4th five day chart and the closing readings on this Friday's Calls and Puts. Their numbers are all crazy expensive.
Read my Feb 9th blog to see how next week Ford Put options fared.

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