Options Trading News

September 24, 2013  Tue 12:16 PM CT

A trader is apparently expecting Royal Caribbean Cruises to capitalize on the woes of a chief competitor.

RCL is down 1.35 percent to $38.85 in afternoon trading, but that is far less than the 7.31 percent drop in arch-rival cruise operator Carnival. CCL fell sharply after reporting weak quarterly numbers and cutting its outlook this morning.

About 3,000 RCL November 42 calls traded in a strong buying pattern in 4 minutes today for $0.51 and $52, according to optionMONSTER's Heat Seeker tracking system. This is clearly a new position, as open interest in the strike was a mere 2 contracts before the trade appeared.

These long calls lock in the purchase price for Royal Caribbean stock for the next two months no matter how far it might climb. They could be sold earlier at a profit before then if premiums gain with rally before then, but the contracts will expire worthless in mid-November if RCL remains below $42. (See our Education section)

Total option volume in the name tops 7,200 contracts today, already more than 5 times its full-session average for the last month. Overall calls outpace puts by nearly 3.5 to 1 so far.
Share this article with your friends

Related Stories


Puts targeting Royal Caribbean

November 27, 2015

Traders are protecting against a pullback through early next year for the cruise-line operator, which is down 7 percent in the last month.


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »