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Carnival bulls looking for a bounce

David Russell (david.russell@optionmonster.com)

Bullish option traders are piling into Carnival as its shares try to hold a key support level.

optionMONSTER's Heat Seeker system detected the purchase of more than 11,000 September 37 calls yesterday, most of which priced for $0.75. Volume was more than 40 times the previous open interest in the strike, showing that this is fresh buying.

These long calls lock in the price where shares can be bought in the cruise-ship operator, letting investors cheaply position for a rally. The contracts can also generate significant leverage but will expire worthless if the stock remains below $37 through mid-September. (See our Education section)

CCL attempted to rally early yesterday but rolled over along with the rest of the market and ended the session down 0.93 percent to $36.22. It's spent the last three weeks attempting to hold the same $36 level where it bounced in April.

Overall option volume in the name was almost 13 times greater than average yesterday, with calls accounting for a bullish 92 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)

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