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Live Nation Stock Dips After Investigative Report, Options Active

Ironically, LYV rival Eventbrite is soaring after its IPO

Sep 20, 2018 at 2:22 PM
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Live Nation Entertainment, Inc. (NYSE:LYV) stock is a notable loser today, down 1.4% at $52, following an investigative report alleging the company's Ticketmaster business promoted software that helped scalpers sell more tickets -- doubling Ticketmaster's commissions. Rubbing salt in the proverbial wounds is an extremely successful initial public opening (IPO) for rival Eventbrite (EB). Meanwhile, options trading is active on LYV stock.

It's actually call trading that's popular today, with calls roughly tripling puts. For perspective, more than 6,000 calls have traded, compared to a daily average of just 380. This is due to a big trade that crossed at the October 55 call, where someone seemingly purchased 3,700 contracts for 57 cents a piece. If that's the case, this bullish trader spent $210,900 (contracts purchased * premium paid * 100 shares per contract) on a bet that LYV shares will recover back above $55 in the coming weeks.

Put buying is usually the more popular strategy from Live Nation options traders. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.39, ranking in the 82nd annual percentile.

For the record, puts are seeing increased activity in today's trading, with more than 2,100 crossing far. This is well above the daily average of 352. Seeing notable activity is the October 50 put, where new positions are opening.

Meanwhile, this dose of troubling news and resultant pullback is a good omen for those shorting the security. While short interest on LYV has been declining in recent months, more than 8% of the float remains in the hands of short sellers. More notably, it would take these bears more than 11 sessions to buy back their positions, based on average daily volumes.

Taking a final look at the chart, the stock has actually pared deeper loses from earlier in the session. It again saw support from the 50-day moving average, bottoming right near this key trendline. Even with today's decline, LYV shares are up roughly 22% year-to-date.

lyv stock chart

 

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