Unusual Options Activity: Endeavor Group Holdings (EDR)

Entertainment and sports company Endeavor Group Holdings (EDR) is slightly up over the past year, but shares have been getting hit hard in recent sessions. One trader sees a further decline in the weeks ahead.

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  • That’s based on the November $20 puts. With 70 days until expiration, 24,309 contracts traded compared to a prior open interest of 144, for a 169-fold jump higher in trading volume. The buyer of the puts paid $0.85 to make the bearish bet.

    Endeavor shares recently traded close to $21.50, so the stock would need to drop about $1.50, or about 7 percent, for the option to move in-the-money.

    Shares are also down about 18 percent since early August when they hit a 52-week high of $26.26.

    The company’s entertainment and sports content is being impacted by the Hollywood strike, as with other media companies.

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  • While Endeavor is coming off a strong year, with earnings up over 1,460 percent, looking forward a big drop in revenue and earnings looks likely.

    Action to take: Interested investors should wait for either a retest of the 52-week low near $18.58, or look for a resolution to the Hollywood strike before getting into shares. At present, the company does not pay a dividend.

    For traders, the November $20 puts are an inexpensive way to play to the stock’s current downtrend in the coming weeks. Traders should also look to take quick profits, especially on any news about the strike ending.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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