Australia, Queensland, Brisbane Central Business District, Mary Street rental car agencies competing signs Avis Budget Rent.
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There’s a “CAR” crash on Wall Street that’s reminding some traders GameStop.
Shares of Avis Budget GroupTicker symbol “CAR” rose from under $100 last month to a record high of nearly $850 in early trading on Wednesday before a sharp reversal lower during the day. The stock closed down 38% and lost another 6% in premarket trading on Thursday. Shares were last trading at about $417 per share.
Options volume rose sharply on Wednesday, with over 200,000 contracts traded, and implied volatility was 235%, compared with 20% for the S&P 500. The volatility is so high that there has been speculation in the market that brokers would change the margin requirements for trading the stock.
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Avis budget, 5 days
My sources at Charles Schwab said that while margin requirements changed on April 9, they were not increased on Tuesday. However, traders with concentrated portfolio positions in CAR are now required to deposit 100% margin, meaning trading must be entirely in cash.
The saga is reminiscent of GameStop five years ago, when wild swings forced many broker-dealers to charge more for trades – and in some cases even restricted trading in the stock.
In the last two days, Avis has traded over 10 million shares. Due to control by two shareholders – Pentwater Capital Management and SRS Investment Management – ​​there are only 36 million shares outstanding and far fewer than are available for trading.
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