Few industries were hit as badly as cruise ships during the pandemic. However, after bottoming out more than a year ago, the value of CCL has more than tripled. And although the latest earnings report showed the company was absorbing a loss, booking volume was 90% higher than the previous quarter. That, coupled with the acceleration in vaccinations and expectations of strong demand this summer, resulted in a number of target price increases for analysts.
Stocks have pulled back from their 2021 high after earnings and failed to break triple-top resistance in the 30-31 range. The pullback has almost hit the 50-day ascending moving average, which is at the 27 level. The 50-day study supported previous withdrawals in February and March. When fundamentals turn cheap, look for support to keep the uptrend going.
If you’re okay with CCL continuing on its uptrend, consider the following trade, where the stock stays above $ 26 to expire in six weeks.
Buy to open CCL 28May21 24 Put (CCL210528P24)
Sale to open CCL 28May21 26 Put (CCL210528P26) for $ 0.65 balance (sale of a vertical)
This balance is $ 0.03 below the midpoint of the options spread when CCL was trading at $ 27. If the stock doesn’t recover quickly from here, you should be able to get close to that amount.
Your commission on this trade is only $ 1.30 per spread. Each spread would then be $ 66.70. This trade reduces your purchasing power by $ 200 and brings your net investment to $ 133.30 ($ 200 – $ 66.70). If CCL closes above $ 26 on May 28, both options will expire worthless and your return on the spread will be 50% ($ 67.70 / $ 133.30).
As with all investments, you should only trade options with money that you can really afford to lose.
Have fun trading,
Tags: Bullish Options Strategies, CCL, Monthly Options, Portfolio, Profit, Profits, Puts, Risk, Vertical Put Spread, Weekly Options
This entry was posted on Monday April 19th, 2021 at 2:16 pm and is filed under Last Minute Strategy, Monthly Options, Stock Option Trading Idea of the Week, Weekly Options.