Market Overview

Is Live Nation Entertainment Set to Sell Off?


Shares of Live Nation Entertainment (NYSE: LYV) are trading higher on the session by 0.47%, at $10.77. The stock hit an intra-day high of $10.96 before selling off. LYV has been moving solidly higher over the past two months, steamed from a screaming move on high volume on January 3rd.

Shares have been consolidating above the 20-day and 50-day moving averages for the past six weeks. In general, the stock looks strong and primed to pop through the most recent high. Options action, however, may be signaling something else altogether.

Puts are highly active today (33x normal volume). The strike seeing the heaviest action is the April 2012 $10.00 put, which has traded 11,700 times on open interest of only 146 contracts. Nearly every put traded in Live Nation Entertainment has been purchased on the offer today. This has pushed 30-day implied volatility higher as well, up 26.46%.

This could very well be a long holder protecting their long position or a fresh long player entering the name with a downside hedge.

Traders that like the name long here should also consider a downside hedge. Delta-Neutral traders could look to sell the April 2012 $10 put and short stock against the position; given its high vol (56.63%) relative to implied (43%) and historical (31%), the option is very pricy.

Live Nation Entertainment, Inc. is a live entertainment company. It is a producer of live music concerts worldwide. The company operates in five segments: Concerts, Ticketing, Artist Nation, eCommerce and Sponsorship.

Live Nation owns, operates, has booking rights for and/or has an interest in 128 venues, including House of Blues music venues and locations, such as The Fillmore in San Francisco, the Hollywood Palladium, the Heineken Music Hall in Amsterdam and the O2 Dublin.

Posted-In: Long Ideas Short Ideas Technicals Options Markets Trading Ideas


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