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Bearish spread targets Royal Caribbean

Chris McKhann (chris.mckhann@optionmonster.com)

A large bearish trade topped Friday's option activity in Royal Caribbean Cruises even as its shares steamed ahead.

optionMONSTER's Depth Charge system shows that a trader bought 4,250 September 36 puts for $2.14 and sold the same number of September 31 puts for $0.64. This is clearly new positioning, as the open interest at each strike was below 100 contracts before the session began.

The put spread cost $1.50, which is the maximum risk to the buyer. The maximum gain of $3.50 would be realized if RCL falls below $31 by expiration in mid-September. (See our Education section)

RCL gained 1.2 percent to $36.99 on Friday, its highest close since January. Shares of the cruise-line operator bounced off support at $32 a month ago.

More than 18,000 RCL options traded on Friday, with fewer than 700 calls. That compares to a daily average of 3,800 contracts in the last month.

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