Options Trading News

Is the rally in Carnival for real?

The cruise-ship operator has taken a beating over the last year amid worries about the global economy and following a deadly accident in the Mediterranean Sea but has been showing signs of improvement this month.

CCL is up 0.92 percent to $34.13 and now back to its highest level since mid-January. optionMONSTER's tracking systems showed a surge of activity in the July puts, with roughly 2,000 contracts each trading in the 30s and 32s. The July 30s were sold for $0.37, while the July 32s were bought for $0.87.

Volume was below open interest in the lower strike, so it appears that the investor was using the 30s as a hedge and rolled the position higher now that the stock has risen. The trade cost $0.50 but raised by $2 the level of downside protection.

It's also possible that both parts of the trade were opened, in which case the strategy was a bearish put spread. Either way, it appears the investor is cautiously long CCL and using the options to insure their investment. (See our Education section)

More than 5,700 contracts have changed hands in the name so far today, compared with about 1,900 in a normal session. Puts account for almost four-fifths of total volume.