'CAR' crash: Avis Budget stock plunge reminding some on Wall Street of GameStop
CNBC • • business
Key Points:
- Avis Budget Group (ticker 'CAR') shares surged from under $100 to nearly $850 in early trading before plummeting 38% by close and dropping further in premarket trading, settling around $417.
- Options trading volume for CAR skyrocketed with over 200,000 contracts and implied volatility hitting 235%, far exceeding the S&P 500's 20%, prompting speculation about margin requirement changes.
- Charles Schwab confirmed margin requirements changed on April 9, but not on the recent surge day; however, traders with concentrated CAR positions now must post 100% margin, requiring cash-only trading.
- The extreme volatility and trading restrictions echo the GameStop saga from five years ago, where brokerages increased trading costs and limited transactions amid wild price swings.
- Trading volume in CAR exceeded 10 million shares over two days, notable given only 36 million shares outstanding and limited float due to major holdings by Pentwater Capital Management and SRS Investment Management.
