CCL Analysis

Carnival Corp. (CCL)

Update 6/22/2017: CCL’s price was little affected by its earnings announcement. A decline in implied volatility allowed me to exit at 27% of maximum potential profit.

Shares showed a net decline of 0.2% over the one day, entry to exit, or a -55% annual rate. The options position produced a 36.3% yield on debit for a +13,231% annual rate.

CCL publishes earnings on Thursday before the opening bell.

I shall use options that trade for the last time nine days hence, on June 30.

Implied volatility stands at 23%, which is 2.1 times the VIX, a measure of the volatility of the S&P 500 index.

CCL’s IV stands in the 26th percentile of its annual range and the 83rd percentile of its most recent broad movement.

The price used for analysis was $66.40.

Premium: $2.18 Expire OTM  
CCL-iron fly Strike Odds Delta
Long 71.00 94.5% 6
Break-even 68.68
Short 66.50 54.3% 48
Short 66.50 45.1% 52
Break-even 64.18
Long 62.00 87.8% 11

The premium is 48% of the width of the position’s wings.

The risk/reward ratio is 1.1:1.

Decision for My Account

I have entered an order on CCL as described above. The stock at the time of entry was priced at $66.26.

By Tim Bovee, Portland, Oregon, June 21, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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