$NCLH call prices sail higher overnight

$NCLH call prices sail higher overnight

by

Shares of Norwegian Cruise Line (NCLH) are sailing higher today, delivering a wave of profits to upside option positions opened only a day ago.

On Nov. 30Market Rebellion’s Unusual Option Activity Service found that 6,000 Weekly $15.50 calls, expiring Dec. 1, were bought for $0.07 to $0.09 with shares at $15.10. This was clearly fresh buying, as open interest in the contract was just 2,313 before the activity appeared.

Those calls traded for as much as $0.56 today, a 522.22% return, while the stock rose 6.23% in the same time period, underscoring how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

NCLH was last trading at $15.98, up 4.72% on the session.

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