Call seller sees limited gains in Carnival

By
A A A

One investor doesn't see a lot of upside in Carnival.

optionMONSTER's tracking systems detected the sale of about 5,000 March 31 calls against open interest of just 1,206 contracts. Most of them priced for $0.20.

The trader is now obligated to sell shares in the cruise-ship operator for $31 if they return to that level. Including the premium earned, the exit price would be about $31.20.

The transaction was probably the work of an investor who owns CCL stock and is using the options as part of a covered call strategy, which reduces risk while limiting upside. In the case of today's trade, he or she probably expect the shares to remain little changed over the next two weeks, at which point the calls would expire worthless. (See our Education section)

CCL is down 2.52 percent to $29.56 in midday trading and has fallen 9 percent so far this year. Most of that decline came after its Costa Concordia ship capsized in mid-January. The stock is now attempting to hold support around the same $29 level where it bottomed out over the summer, which has been support and resistance going back to mid-2009.

Overall option volume is 7 times greater than average so far today.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CCL

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

The Pumpkin Carvers
The Pumpkin Carvers                 
The Diamond Cutter
The Diamond Cutter                  

Stocks

Referenced

67%

Most Active by Volume

56,834,794
    $15.52 unch
47,736,761
  • $94.72 ▲ 0.83%
41,992,984
  • $2.47 ▲ 11.76%
40,893,734
  • $34.7901 ▲ 2.14%
39,324,803
  • $69.27 ▼ 0.19%
39,276,613
  • $7.28 ▲ 2.68%
39,084,483
  • $44.83 ▼ 0.01%
33,527,212
  • $26.02 ▲ 0.15%
As of 7/22/2014, 04:03 PM