Options Trading News

September 17, 2013  Tue 3:16 AM CT

A volatility play topped the option action in Royal Caribbean Cruises as shares hit a two-year high.

optionMONSTER systems show that a trader bought 4,000 January 39 puts for the ask price of $2.49. The previous open interest at that strike was just 266 contracts, so it is clearly a new position.

Less than a minute later, a single print of 175,000 shares of RCL was bought for $39.83. That matched the delta of the options position, creating a position that is looking for higher volatility and/or a move sharply higher or lower in either direction. (See our Education section)

RCL rose 1.53 percent to $39.79 yesterday, its highest close since May 2011. The cruise-line operator bounced off support at $32 in late June. 
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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.

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