Short Sellers Are Now Paying More to Short AMC Stock

Short AMC Stock
The cost to short AMC stock goes up

AMC’s short borrow fee is rising again and short sellers are now paying more to short AMC stock.

This is the fee short sellers pay to borrow and short the stock.

It fell as low as 0.30% earlier this year but has now risen to 18.60%.

Although the short borrow fee is still relatively low, the progression could lead to more impactful losses.

Last year hedge funds lost billions betting against the world’s largest movie theatre chain.

Overleveraged positions with high short borrow fee rates only multiplied losses.

Rising short borrow fees could incentivize short sellers to completely ditch the play and close their short positions as shorting becomes more expensive.

Let’s break it down together.

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AMC’s short borrow fee increases

AMC Short Borrow Fee

AMC’s short borrow fee rate has steadily been increasing as the markets have tanked.

It comes as no surprise that the fee to short AMC stock would increase during this liquidity crisis.

The SPY officially hit bear market territory two weeks ago, but the market bounced rather quickly, trading just above bear market levels.

AMC continues to be one of the heaviest shorted stocks in the market.

It wiped billions of dollars from hedge funds shorting it last year.

And with a high short interest of 22.52%, AMC has more than enough juice to squeeze shorts from their positions.

But AMC’s short borrow fee rate and short interest percentage aren’t the only metrics increasing.

Pressure is escalating as AMC’s shares on loan reach an all-time high.

Pressure escalates as AMC’s shares on loan skyrocket

AMC shares on loan

AMC’s current shares on loan have reached 185 million.

These shares on loan eventually have to be returned to the lender by buying back the stock in the lit market (NYSE).

The massive buying pressure is going to create a high demand for the stock.

As the demand for the security goes up, so does the cost to buy it (the value of the security).

When AMC surged to $72 per share in June, it had roughly just over 100 million shares on loan and a short interest of 24% before falling to 20%, then 14%.

Today, AMC’s shares on loan have hit 191 million with a high short interest of 22.52%.

AMC’s Short Interest Data Updated Daily Here

Short sellers owe their lenders more now than they did when AMC shot up to $72 last June.

No matter what the catalyst is, AMC is inevitably going to surge again.

Related: Pressure Escalates as AMC's Shares on Loan Skyrocket

Will AMC’s increasing borrow fee rate force shorts to close positions?

AMC short borrow fee rate

AMC’s increasing short borrow fee rate may certainly incentivize short sellers to close their short positions.

The stock is slowly becoming harder to short and the cost to borrow it might prove to not be worth risking significant losses as the market adjusts itself for a reversal.

At some point, it’s going to be time to start betting long.

As you can tell, short sellers have the biggest risk here.

One simple bull rally can eliminate short sellers’ portfolios.

And with the SPY showing significant strength in the $400 level, one can assume the markets have potentially found a bottom.

The SPY momentarily hit official bear market levels last week but has managed to trade just above it.

A significant break upwards could bring the entire markets back up, hurting short sellers.

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Related: These Two Signs Will Tell You a Short Squeeze is Over

11 Comments

  1. Jozzy

    Hello Frank you are doing a mega job I am very grateful for the work you do every day for the community, if all this has turned out positively for us I invite you to me in Croatia….

  2. Eric Cuttill

    Frank…
    I wish you worked for and/or owned a major broadcast…. That way I know that America would be getting actual accurate news…. Thanks for your journalistic skill and the gifts you give us every day…
    Appreciate you.
    -E.Cuttill

    • Frank Nez

      I appreciate the kind words brother. I am doing the best to combat mainstream media with my platform. Thank you for being a top ape in the community and for sharing the information 🤝 I see you.

      • Eric Ape Cuttill

        👊

  3. Tom

    Is there 185mm shares on loan or is it $170mm?
    Also, has the interest rate increased to 23.25% or 23.68%?

    • Frank Nez

      Hi Tom,

      It’s 185 and 23.68% – I just updated these, thanks for catching that.

  4. Gorilla Grodd

    Great Article Brother! 🙂

    • Frank Nez

      Thanks brother 👊

  5. Shimmer

    Hi Apes , This is Shimmer and I think we are going to be rich !
    🚨2021 AMC Total Vol. vs Darkpool Vol. vs Darkpool Short🚨
    Tot Traded Vol: 28,861,160,055
    Tot DP Traded Vol: 15,229,785,328(52.77% of Total Traded)
    Tot Vol Reported: 24,065,954,138
    Tot Short: 11,288,161,387(46.91% of Reported Vol)
    DP Short: 6,646,133,767(58.88% of Total Short)

  6. Frank Nez

    Let’s start a discussion! Leave your thoughts below.

    • Luis

      Chissà se rivedremo $ 72

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