Tag: Webull

Webull Reports AMC Hard to Borrow with Whopping Fee

Market News Daily - Webull Reports AMC Hard to Borrow with Whopping Fee.
Market News Daily – Webull Reports AMC Hard to Borrow with Whopping Fee.

Webull is reporting AMC Entertainment (NYSE:AMC) hard to borrow (HTB) with a fee rate of 436.26%.

We’ve seen AMC’s borrow fee dramatically increase to 244% and even get deemed the #1 stock with the highest borrow fees by S3 Partners.

AMC’s borrow fee rate is the annual fee hedge funds are paying to borrow AMC stock and short the company.

According to these numbers, hedge funds are burning several tens of millions of dollars every month shorting AMC Entertainment.

But Webull’s HTB fee rate works a little differently – more on that in just a moment.

A sharp rise in AMC stock will result in bigger losses for short sellers, though company shares are currently down more than -37% in the past month and -0.38% this year-to-date.

And with AMC’s legal settlement with APE (NYSE:APE) and approved reverse stock split from shareholders, there’s a lot of uncertainty of how shareholders will respond to the new market changes.

Many shareholders are growing resentful of CEO Adam Aron’s strategy, which has done nothing but dilute the stock and cause bigger losses for investors.

Still, the CEO’s strategy may be the only solution to end Wall Street’s short thesis.

But investors want more — the commencing of a short squeeze.

Webull Hard to Borrow Explained

According to Webull, “a hard-to-borrow stock is used to indicate what stocks are difficult to borrow for short sale transactions.

If you are short selling a ”hard-to-borrow” stock, you’ll have to pay a daily stock borrow fee, which changes based on the stock’s price and its availability.

Each stock’s hard-to-borrow fee rate varies depending on the volatility and scarcity of the stock.

Note that a fee rate change can significantly impact the profit or loss of any short sale.

If the stock you’ve shorted is classified by Webull as hard to borrow, the fee rate you pay on the loan of these stocks may vary depending on a number of factors, including availability and supply and demand of shares.”

Stonk-O-Tracker is currently showing there are 0 shares available to borrow through the borrow fee rate has been between 286% and 351% since the beginning of the week.

stonk o tracker borrow fee

Ortex is reporting a cost to borrow of 232.72 (updated daily).

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Market News Today - Webull Reports AMC Hard to Borrow with Whopping Fee.
Market News Today – Webull Reports AMC Hard to Borrow with Whopping Fee.

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Webull Increases AMC’s Short Selling Fee Rate to 56.99%

AMC Webull
Market News: AMC’s Short Selling Fee Rate Rises.

The fee rate to short AMC stock on Webull is now 56.99%.

The broker has labeled the movie theatre stock as ‘hard to borrow’.

AMC’s short selling fee rate is quite high compared to much larger cap companies.

For example: Tesla (TSLA), Apple (AAPL), and Amazon (AMZN) all have a short selling fee rate of only 9.49%.

GameStop (GME) shares are also labeled as ‘hard to borrow’ but with a short selling fee rate of only 23.74%, 33.25% less than AMC Entertainment (AMC).

Webull also currently has a 150% maintenance requirement for AMC short sellers.

This means 150% of the value of the short sale is required as the initial margin.

If the value of the position falls below maintenance margin requirements, the short seller will face a margin call and be asked to close the position or increase funds into the margin account.

Here’s the latest AMC Entertainment news.

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AMC’s share price continues to slide even as the company simultaneously produces results for Wall Street to take a look at.

CEO Adam Aron has been vocal about Wall Street doom prophets and ‘naysayers’ on social media, taking a chance to address them every time the company takes a step forward.

AMC shares rose 4.54% on Wednesday to $5.30 after experiencing a week-low of $4.74 on Monday.

But the AMC community remains resilient.

Despite mainstream media and corporate fear, retail investors aren’t giving up yet.

Shareholders anticipate probabilities of squeezing short sellers again will rise during the next bull market.

When that will be, no one knows.

Though Bank of America’s CEO says he predicts a recession will hit the U.S. economy during the first quarter of 2023 and ease by the third quarter.

If true, the markets might not pick up until the end of 2023 or start of 2024.

For the retail community it’s no longer a question whether if AMC Entertainment will squeeze or not, but rather when.

Recreating a Big Event

AMC All-Time High | Franknez.com.
AMC All-Time High | Franknez.com.

Short sellers are already facing high fees to short the movie theatre chain stock, and regulators are already under fire for allowing dark and off-exchanges to suppress securities in the market.

So, what will recreate big price movements like we witnessed last year?

In my personal opinion, the best time retail investors will want to play offense is when the markets begin to favor long positions.

It’s during bull markets that we see company stock perform extremely well.

Like the events that occurred in January and June of 2021, playing offense during a bull market tends to trigger intense price action.

However, AMC’s short selling fee and maintenance requirements are currently high.

This means retail and institutional investors still have an upper hand, as well as the potential to recreate these events much sooner.

They’ll just need a lot of capital, especially from institutions, to see this come to fruition.

But I’m curious to hear your thoughts on this.

Leave a comment down below.

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