LYV – Live Nation Entertainment, Inc. – Shares of the producer of live music concerts surged more than 4.65% to $12.36 late in the trading day. The rally in the price of the underlying stock inspired bullish options trading strategists to take action. One optimistic investor sold short 12,900 puts at the July $10 strike to pocket an average premium of $0.125 per contract. The trader keeps the full $0.125 premium per contract as long as Live Nation’s shares exceed $10.00 through July expiration. The put seller is obliged to have shares of the underlying stock put to him at an effective price of $9.875 if the puts land in-the-money by expiration day next month.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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