CCL – Carnival Corporation – Pessimistic options investors shed call options on cruise operator, Carnival Corp., in the first half of the trading session with shares of the underlying stock down 2.50% to stand at $33.87 as of 1:05 pm (ET). Earlier in the trading day shares of the world’s largest cruise operator fell 4% to touch down at an intraday low of $33.34. Carnival’s shares sank after the firm’s third-quarter earnings forecast of $1.43 to $1.47 a share came in below Wall Street estimates of $1.52 a share. Bearish options strategists responded to the dip in shares today by shedding call options in the July contract. Investors sold approximately 2,400 calls at the July $36 strike for an average premium of $0.44 per contract. Call sellers at this strike price keep the full premium received on the transaction as long as Carnival’s shares trade below $36.00 through July expiration. Bears with a bigger appetite for risk shed roughly 1,900 calls at the lower July $35 strike to pocket an average premium of $0.76 apiece. Investors short the July $35 strike calls walk away with the full premium received as long as the calls fail to land in-the-money by expiration day next month. CCL’s overall reading of options implied volatility is down 14.5% to 35.74% in afternoon trading following the firm’s second-quarter earnings report released this morning.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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