Unusual Option Activity: Carnival Corporation (CCL)

Cruise ship operator Carnival Corporation (CCL) has soared in the past year, with shares up 53 percent. One trader sees shares cruising higher in the coming weeks.

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  • That’s based on the March $15 calls. With 42 days until expiration, 50,159 contracts traded compared to a prior open interest of 1,014, for a 49-fold rise in volume on the trade. The buyer of the calls paid $2.05 to make the bullish bet.

    With Carnival shares trading for about $16.50, the option is already about $1.50 in-the-money. The strike price of the option is also well under the stock’s 52-week high of $19.74.

    Carnival has seen revenues rise 40 percent over the past year as demand for cruises has remained strong as part of a broader strength in travel demand.

    However, Carnival is still running at a slight loss, although it stands to tun a profit this year.

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  • Action to take: Carnival shares look likely to continue their long-term uptrend following a pullback in recent weeks. Investors may like shares here as a momentum play. Carnival does not currently pay dividends.

    For traders, the March calls are well positioned for mid-double-digit gains on a rebound in shares in the coming weeks. Speculative traders may want to select a higher strike price at the increased risk of the option expiring worthless.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.


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