Avis Budget Group Plunges 70% After 600% Rally, Brokers Impose 100% Margin
Avis Budget Group shares surged nearly 600% since late March before plunging over 70% in two days, generating roughly $2.8 billion in short-seller gains. The volatile reversal prompted brokers to impose 100% margin requirements as options volume topped 200,000 contracts against a 36 million-share float.
1. Epic Short-Squeeze Surge and Collapse
Since late March, Avis Budget shares skyrocketed nearly 600% to a record intraday high above $713 before collapsing more than 70% over two sessions as speculative buying lost momentum.
2. Short-Seller Gains and Market Positioning
The rapid reversal generated approximately $2.8 billion in profits for short sellers, effectively offsetting prior losses, while trading volume exceeded 10 million shares against a float of just 36 million shares.
3. Margin Requirements and Trading Restrictions
Brokers responded to extreme volatility by raising margin requirements to 100%, and options contract volume surged past 200,000 contracts with implied volatility near 235%, tightening liquidity and limiting leveraged buying.