OptionsHouse

Options Trading News

April 11, 2013  Thu 9:41 AM CT

RCL: SEE CHART GET CHAIN FIND STRATEGIES
Royal Caribbean is trying to rebound, but investors remain wary.

optionMONSTER's Depth Charge monitoring system detected the purchase of 5,000 January 20 puts for $0.43 in volume well above the strike's previous open interest of 954 contracts, clearly showing that this is a new position. The trade dominated activity in the cruise-line operator, accounting for about 90 percent of volume so far.

RCL is up 0.24 percent to $33.27 in morning trading. It's been lagging the broader market and has fallen about 2 percent this year as economic weakness in Europe hurts demand. The shares have been trying to bounce at their 200-day moving average in the last week.

Owning puts
locks in the price where investors can sell the stock, allowing them to hedge long positions. Today's trader can now enjoy unlimited profits if it rallies, with a guaranteed exit price through early 2014 if it drops. (See our Education section for other ways to manage risk.)

Puts outnumber calls by a bearish 30-to-1 ratio in the company so far today, according to the Depth Charge. Total option volume is about 50 percent greater than average. 
Share this article with your friends


Related Stories

RCL

Bullish play extended in Royal Caribbean

April 19, 2016

The cruise-line operator is up 9 percent in the last month, and investors are rolling calls in the name for the third time in two weeks.

RCL

Bulls targeting Royal Caribbean Cruises

April 15, 2016

The cruise-ship operator is up 16 percent in the last month and is expected to announce its next quarterly results next week.

RCL

How trader is riding Royal Caribbean

April 5, 2016

A bullish position is being extended in the cruise-line operator, which is trying to rebound from a steep drop earlier this year.

OptionsHouse

Premium Services

Education & Strategy

Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

View more education articles »