Wall Street traders betting against AMC… Investors buying meme stocks need to be ready for downside risks: Strategist

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Some Wall Street traders are betting against another massive rally in AMC Entertainment Holdings Inc (AMC.N) and other “meme” stocks this week through a type of wager in the options market that would limit their losses should retail investors behind the run-up prove them wrong.

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A Reuters analysis of options data and interviews with market participants, including a Wall Street banker and a fund manager with $30 billion in assets, show that some institutional investors have ramped up complex options trades that let them bet the shares will fall.

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The so-called “bear put spread,” a common bearish options strategy, also limits profits.



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