LYV – Live Nation Entertainment Inc. – Shares of the producer of live music concerts are down 1.25% to $11.86 as of 12:15 pm (ET) after earlier slumping 8.15% to touch down at an intraday low of $11.03. One options investor populating Live Nation’s January 2011 contract appears optimistic that shares of the underlying stock are not likely to collapse ahead of expiration. The trader opted to sell short 4,000 puts at the January 2011 $7.5 strike for a premium of $0.50 apiece. Option premium received on the trade is safe in the investor’s wallet as long as LYV’s shares trade above $7.50 through expiration day next year.
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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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