How investor is riding Royal Caribbean
At least one trader is looking for Royal Caribbean Cruises to rally in the next month.
optionMONSTER's monitoring program detected the purchase of 1,250 July 77.50 for $1.81 and the sale of 1,250 July 82.50 calls for $0.36 yesterday. Volume was above open interest in both strikes, showing that these are new positions.
This vertical spread is looking for RCL to rally above $77.50 by expiration in mid-July. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $82.50. (See our Education section)
RCL rose 0.43 percent to $76.46 yesterday and is up 4 percent in the last week. The cruise-line operator reported bullish results on April 29 and is expected to announce its next earnings numbers before the market opens on July 28, about two weeks after yesterday's call spread expires.
Overall option volume was about average in RCL yesterday. Calls outnumbered puts by a bullish 7-to-1 ratio.
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