For the second time in three days, the bulls want to take a cruise with Carnival.
optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 10,000 December 43 calls for $0.55 and $0.60. Volume was 63 times open interest at the strike, which indicates that new positions were initiated.
Long calls lock in the price where investors can buy a stock, which keeps them positioned to profit from a rally with much less risk than purchasing shares directly. The relatively low cost of the options can also result in significant leverage on a percentage basis if the stock does rise. For instance, the January 43 calls bought on Wednesday for $0.75 are already up more than 20 percent. (See our Education section)
CCL is up 0.93 percent to $41.28 in afternoon trading and has risen 19 percent in the last month. It's been running along with the rest of the market and beat expectations the last time earnings came out in September.
The recent activity is interesting because traders have been targeting $43, a level that the stock hasn't seen since gapping lower in early 2011.
Total option volume in Carnival is already triple its full-session average for the last month, with overall calls outnumbering puts by more than 100 to 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
