Live Nation (LYV) loses 76 cents to $9.74 on disappointing earnings and one strategist sells 11,000 April 10 puts on the stock for 90 cents to buy 20,000 Mar 7 puts for 17.5 cents. The spread appears to roll a position opened 11 days ago when bears were circling LYV and 12,000 April 10 puts traded in smaller lots for 60 and 70 cents (see 2/13 color). Shares are down 9.5 percent since that time and, while the in-the-money Apr 10s are being closed for a profit, the strategist is opening a new larger position in deeper out-of-the-money Mar 7.5 puts. The activity seems to express the view that the weakness in LYV will continue through the March expiration, which is three weeks from today. Yet, implied volatility is down 9.5 percent to 50.5 now that the earnings event-risk has passed.
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About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.