Monday, June 26, 2006

Carnival

From time to time I find an option that seems to be just about free.

One I've come across this time is Carnival (symbol CCL). Here's the chart; no broken trendline yet, but there seems to be a topping pattern completed (highlighted in green) which also seems similar to an earlier top that preceded a fall (other, earlier green).


At the moment, the January 2007 $50 put on this has an ask price of $9.40 (its symbol is .CCLMJ), and the stock is at $41. That means you are paying 40 cents for the time premium between now and seven months from now. To me that's ridiculous, and a great bargain. I bought some of these thing morning with a contingent stop price of $49.30

4 comments:

John Wheatcroft said...

This is an interesting stock - it is showing 5 inside days (including today) off the long candle of a week ago. It will go where the market goes (actually it seems to have led back in May).

SPY is showing 7! inside days off a long candle. Amazing! It looks to me like it is forming a pennant.

kimberlysgarden said...

John or Tim,
Can you tell me the time frame of the chart Tim showed--the price pattern of the one I pulled up on Phophet looks much different. Thanks.

onemilliondollarman said...

kimberlysgarden,

try a 15 yr or 20yr daily chart....

OMDM

Mark said...

Thanks Tim, for pointing out what a bargain option is. Now that I understand them a bit, I can understand more about what you are talking about. I definitely didn't go bargain shopping with the ones you listed the other day. However, I'm now a much wiser shopper.