Shares of Live Nation Entertainment are plummeting today, and its option activity is not surprisingly led by puts.
LYV, which operates live-entertainment venues, is down 6.57 percent to $9.81 following a disappointing earnings report after yesterday's close. The stock traded as low as $9.45 earlier in the session, taking it back to levels from the beginning of the year, though shares remain well off their 52-week low of $7.14 set in early October.
More than 34,000 LYV options have traded so far today, far outpacing its daily average of fewer than 1,000 contracts. Almost all of that action is in one put spread.
A trader sold 10,497 April 10 put for $0.90, under the open interest of 11,779 contracts, then bought 20,000 April 7.50 puts for $0.20. The 7.50 puts were more than 20 times the previous open interest at that strike, so at least this part of the trade was a new position.
It could be that this trader is rolling an existing position to a lower strike and doubling its size while taking some profits at the same time. This could also be a new opening backspread , which would take in a credit that would be kept if LYV is above $10 at expiration but can profit greatly if shares continue to collapse. (See our Education section)
More From optionMONSTER
European stocks rose for a third straight session on Monday and the euro bounced back from two-year lows, as Greek …
There are no comments yet