Unusual Options Activity in Hertz $HTZ - PowerPoint PPT Presentation

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Unusual Options Activity in Hertz $HTZ

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Recently, there has been some unusual options activity in Hertz $HTZ. – PowerPoint PPT presentation

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Title: Unusual Options Activity in Hertz $HTZ


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  • OPTIONS TRADING

Unusual Options Activity in Hertz HTZ
2
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  • Hi, My name is Steve and Im with Options Trading
    Research, today were reviewing our recently
    published article

5
  • Unusual Options Activity in Hertz HTZ

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  • As many of you know, unusual options activity can
    be a valuable indicator as to what traders are
    thinking, and more importantly, where these
    stocks are heading in the short-term.

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  • This is something professional options traders
    pay a lot of attention to, and for good reason
    Unusual options activity can tip off big moves
    in a stock, either up or down.

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  • So lets take a look at some interesting
    activity that caught our eye this week Hertz
    HTZ is a massive car and truck rental company,
    with over 10 billion in annual revenues.

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  • While HTZ is known more for car rentals, the
    company also has a big equipment rental division.
    For a good description of the company.

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  • HTZ is trading at 18.72, down 20 for the year.
    Thats 27 below the 52-week high, and 26 above
    the 52-week low.

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  • So what does unusual options activity in HTZ tell
    us?

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  • HTZ has been in a steady downtrend this year.
    Investors may be concerned about the 18 billion
    in debt, with only 800 million in cash in
    comparison.

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  • Granted, car and equipment rental companies do
    carry a lot of debt due to the natural of the
    business. But, its still a pretty large
    disparity at a time when interest rates are
    likely going to move higher.

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  • Whats more, Avis CAR, a major competitor, just
    posted worse than expected quarterly results.
    Investors are jumping out of HTZ on the news, as
    they expect equally dismal numbers from the
    latest quarter.

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  • Heres the deal
  •  This week, a large amount of puts traded in HTZ
    options. Keep in mind, a put option makes money
    when the underlying stock goes down before its
    expiration date.

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  • To be more specific, traders bought over 11,000
    November 18 puts from 0.45 up to 0.75. The
    volume is far exceeding the open interest, so
    this is definitely opening action.

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  • Heres the chart of HTZ

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  • HTZ shares finally broke above the 50-day moving
    average after trending down for most of the year.

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  • After moving sideways for about a month, the
    stock price has taken a turn for the worse today
    as it plunges towards the 50-day line.

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  • The action in HTZ puts is suggesting the company
    will post poor results, much like Avis did.
    However, if the earnings come out better than
    expected, we could see a large rebound off the
    50-day line.

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  • Given the amount of put buying though, I wouldnt
    expect good news. Options traders are very
    clearly expecting a break below 18. Well see
    what happens when earnings are released at the
    end of this week.

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  • More Options Trading Ideas

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  • Keep in mind, theres a lot more unusual options
    activity going on than what we discuss here. We
    just try to bring you what we feel are the most
    significant ones and the ones you might actually
    be able to make some money on!

25
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