Weekend Trader Alert
December 17, 2023
Open Positions Update
There are no portfolio updates this week.The following is this week's recommendation:
Live Nation Entertainment (LYV)Place a limit order to buy the Live Nation Entertainment (LYV) February 16, 2024 90-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, December 15, this option was offered at $7.30. LYV closed at $93.00 on Friday, December 15.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Tuesday, January 16, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of entertainment conglomerate Live Nation Entertainment (LYV) just broke out from a downtrend on the charts, moving above the $88-$90 level that has acted as resistance since August. What’s more, after this breakout, the shares moved above the +20% year-to-date mark where they found support for two days last week. Now that a confluence of moving averages are moving higher to support price action, it looks like the ideal time to bet on LYV with calls.
There’s a large amount of calls falling off at the 90-strike for December expiration, which could also help send Live Nation Entertainment stock higher. What’s more, short interest is up 5.4% in the last two weeks and is continuing to churn higher. The shares sold short account for 8.02% of LYV’s total available float, and the equity tends to move higher when short interest is on the rise.
Options traders are pricing in low volatility expectations right now, meaning premium buyers can speculate for a steal. This is per the stock’s Schaeffer’s Volatility Index (SVI) reading that ranks higher than just 26% of annual readings. Our recommended February 90 strike call has a leverage ratio of 8.3, and will double on a 12.4% pop in the underlying shares.
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