How Trader is Playing Royal Caribbean

Investors are taking a slow-money cruise with Royal Caribbean.

optionMONSTER’s monitoring programs detected the sale of 7,000 January 30 calls for $2.17. The trade came seconds after 8,000 December 28 calls were purchased for an average premium of $3.025, but volume was below open interest in those. This suggests that an existing short position was closed and rolled forward in time.

The investor probably owns shares in the cruise-ship operator, and selling the calls lets him or her collect income while reducing the volatility of the holdings. By adjusting the position, the trader raised by $2 the price at which the stock must be sold.

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