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

Profit taking in Royal Caribbean

August 12, 2015

Traders are taking money off the table following a big move in the cruise-ship operator.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »