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Zach Scheidt

Helping families build wealth so they can focus on what really matters

INCOME MODEL TRADE ALERT — NCLH

August 10, 2022 at 10:38 am by Zach Scheidt

Selling NCLH puts for income.

Norwegian Cruise Lines (NCLH) is the world’s third-largest cruise company.

The stock has been under pressure during the pandemic period as cruise ships were originally shut down and since then have faced challenges getting their businesses back up and running.

But in today’s market, affluent consumers are spending more on travel and leisure. Cruises are being booked, and revenue is picking up.

Shares traded lower this week after the company announced results for the second quarter. The company doesn’t expect to reach pre-pandemic occupancy levels until Q2 of next year.

NCLH is also facing higher labor and fuel costs.

But some of these inflation factors are starting to ease which should help NCLH get back to profitability sooner rather than later. The stock is now rebounding following its drop and should benefit from strong consumer spending on travel.

By selling the September $12.50 puts near $0.75, we’re able to collect an annualized yield near 59%, while also giving us roughly $0.75 per share in cushion between the current market price for NCLH and our strike price.

  • Sell (to open) 4 NCLH September 16th $12.50 puts
  • Limit: $0.75 or more
  • The new position will represent roughly 5.7% of our model.
    ~~~~~~~~
  • 10:44 Executed
  • Sold 4 NCLH September 16th $12.50 puts @ $0.75

(Trade procedure: 5 minutes after this notification posts, I will enter the trade on my brokerage platform. Once filled I will edit this post to include execution prices.)

Please note: I am placing these trades in my own account. And while I notify the group of all trades 5 minutes before I place my own personal trades, this creates a conflict of interest. Please review all disclosures and agreements included with your subscription packet.

Filed Under: income trades Tagged With: $NCLH

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