Avis Budget Group Options Rocket Over 28,000%: What Investors Should Know

One of the most talked-about stocks during Tuesday’s trading session was Avis Budget Group Inc. (NASDAQ: CAR). Investors who bought in early on the stock Tuesday saw shares surge. Options traders fared even better.

What Happened: Rental car company Avis reported earnings per share of $10.74 for the third quarter, beating the consensus street estimate by more than $4. The company also announced it was adding an additional $1 billion to its share buyback.

Shares saw a potential short squeeze Tuesday with a reported 28.8% of the float short and shares quickly traded at a triple-digit increase over Monday’s closing price.

Shares of Avis Budget traded between $173 and $545.11 during Tuesday’s trading session. Shares closed at $357.17, up 108.31% for the trading session.

Related Link: Avis Stock Pulls Back After Gaining 200% On Earnings, Short Squeeze 

Options Traders: Investors or traders who bought call options of CAR may have fared better with returns topping out in the thousands and tens of thousands of percentage gains Tuesday.

The highest-priced call option for CAR with a Nov. 19 strike date was $260. Investors poured into this option, which traded between $0.40 and $300.80 during Tuesday’s trading session.

The calls ended the day up 10,756% to $117.25. Earlier in the day, the options were up more than 28,000% as investors bet on continued volatility in Avis Budget and a potential future short squeeze happening again.

Investors will wait and see if a new options chain is added with higher strike prices offered in the future given the new highs set by CAR shares Tuesday. 

Photo: Avis Budget Group