Royal Caribbean has been dead in the water, and one investor thinks it will continue to drift.
Option volume in the cruise-ship company has passed 38,000 contracts, almost 13 times the daily average, with a four-way combination trade dominating the trade. Some 10,000 September 25 puts were bought for $0.51 and 8,500 of the September 26 calls were bought for $0.75. Seconds later, 10,000 October 25 puts were sold for $0.93 and $8,500 of the October 27 calls were sold for $0.74.
Volume was below open interest in the September options but not the Octobers, so it looks like the trader rolled a short strangle position . He or she now stands to make more money if shares remain between $25 and $27 through October expiration. See our Education Section for more on market-neutral strategies that make money from the passage of time rather than directional moves.
RCL declined 0.48 percent to $25.84 in late morning trading and has been hovering around this area for most of the month. It’s also been hitting resistance around $26.50 since early May, and was down to the 2012 lows near $22 at the start of June.
Overall option volume in the name is 13 times greater than average so far today.
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