Norwegian Cruise Line options position closed after share rally
A podcast speaker said the trade captured most of its potential profit after Norwegian’s stock recovered.
Norwegian Cruise Line has lagged Royal Caribbean and Carnival in stock returns, according to a speaker in a podcast excerpt about an options trade involving the cruise company.
The speaker attributed pressure on Norwegian’s shares to a difficult first quarter and guidance described as rough. The stock fell to about $16.14 after having traded at higher levels, according to the excerpt.
The speaker said a Norwegian put option with a $10 strike price and December expiration was sold for a $0.69 premium. At the time, 212 days remained until expiration, and the targeted return was 9.6%.
According to the speaker, the position was closed after 83 days as Norwegian’s stock rallied. The trade generated $62 of a possible $69 profit. The speaker characterized the outcome as a 29.3% return, or nearly 7% based on the net cash required.
