Options Trading News

September 5, 2013  Thu 3:47 AM CT

One investor sees smoother sailing ahead for Royal Caribbean Cruises.

optionMONSTER's detected the sale of 1,246 September 35 calls for $1.92 and the purchase of 1,654 October 36 calls for $1.83, above the ask price at the time. Volume was below previous open interest in the September contracts but above it in the October strike.

This indicates that an investor is rolling a long-call position forward by a month and to a higher strike price. He or she is closing the September calls, which expire two weeks from tomorrow, and opening the November contracts to get more time for the trade to work. The adjustment is particularly bullish because the investor targeting a move $1 higher while increasing the size of the position. (See our Education section)

RCL rose 0.33 percent yesterday to close at $37.02. The cruise-ship operator gapped below its book value on Aug. 27 but bounced off its 50-day average and next day and has been drifting higher since.

Total option volume in RCL yesterday was nearly 5 times its daily average for the last month.
Share this article with your friends

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »