Selling RCL puts for income.
Royal Caribbean Cruises (RCL) should benefit from renewed travel in 2022.
Travel and leisure stocks have held up well despite the recent market weakness. And thanks to the short-term uncertainty, option contracts for RCL trade at a premium. That’s good news for our strategy because we can collect more income while still leaving plenty of buffer in case the stock pulls back.
By selling the February $75 puts near $2.25, we’re able to collect an annualized yield near 39%, while also giving us roughly $5.50 per share in cushion between the current market price for RCL and our strike price.
- Sell (to open) 1 RCL February 18th $75 put
- Limit: $2.25 or more
- The new position will represent roughly 7.7% of our model.
- 11:25 Executed
- Sold 1 RCL Feb 18th $75 put @ $2.25