How trader is playing Royal Caribbean

By David Russell,

Shutterstock photo

Investors are taking a slow-money cruise with Royal Caribbean.

optionMONSTER's monitoring programs detected the sale of 7,000 January 30 calls for $2.17. The trade came seconds after 8,000 December 28 calls were purchased for an average premium of $3.025, but volume was below open interest in those. This suggests that an existing short position was closed and rolled forward in time.

The investor probably owns shares in the cruise-ship operator, and selling the calls lets him or her collect income while reducing the volatility of the holdings. By adjusting the position, the trader raised by $2 the price at which the stock must be sold.

RCL is up 0.25 percent to $29.86 in early afternoon trading but is up 16 percent since the middle of last month. Although the last earnings report in July missed expectations, the stock has been bottoming since October 2011 and recently fighting its way higher. Yesterday there was also bullish activity in rival Carnival Cruises .

Overall option volume in RCL is almost triple the daily average so far in the session.

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

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

This article appears in: Investing Options
Referenced Stocks: RCL

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by