Shares in FSLR have declined roughly 8.0%
since the put spread was initiated, allowing the investor to sell the
spread today at a net premium of $3.58 per contract. Next, it appears
the strategist established a fresh bearish stance on First Solar, buying
the 12,533-lot Mar. $27/$34 put spread at a net premium of $1.80 per
contract. Profits are available on the position in the event that FSLR's
shares decline another 9.2% to breach the effective breakeven price of
$32.20 by expiration. The put player may walk away with maximum possible
profits of $5.20 per contract at March expiration should the price of
the underlying plunge 23.9% to settle below $27.00. Of course, the
trader may choose to take profits on the new bearish spread in advance
of expiration should the spread widen out in the next few weeks.
Carnival Corp. (CCL)– Bearish
activity in the front month options on cruise operator Carnival this
morning suggests the price of the underlying shares may sink to fresh
52-week lows in the next few weeks. Shares in CCL dipped to as low as
$29.22 following the Costa Concordia tragedy in January and remain
depressed more than one month later, with shares today down 0.80% on the
session to stand at $29.73 as of 11:55 a.m. in New York. Traders
snapped up in- and out-of-the-money puts to prepare for a CCL pullback,
exchanging around 2,295 contracts at the Mar. $28 strike against open
interest of 1,154 positions. Most of the $28 strike put options appear
to have been purchased for an average premium of $0.31 each, thus
positioning buyers to profit at expiration in the event that Carnival's
shares drop 6.9% to breach the effective breakeven price of $27.69. Mar.
$29 strike puts attracted bearish bets as well, with around 1,500 of
the contracts purchased for an average premium of $0.59 each.
In-the-money puts at the Mar. $31 strike with a price tag of $1.70
apiece were bought some 750 times this morning. Carnival Corp. is
scheduled to report first-quarter earnings on March 22, nearly one week
after the March expiry put options will have expired. But, investors
buying around 1,200 puts at the April $30 strike for an average premium
of $1.88 each today may see the value of their contracts rise should
shares in the cruise operator drop following the Q1 report next month.