Royal Caribbean Cruises Limited (RCL: sentiment, chart, options) was the center of some heavy options trading on Monday, as more than 46,700 contracts changed hands...(Read More)

Today’s tickers: RCL, GE, YHOO, XLF, X, FCX, AIG, CF, JAVA & UAUA

RCL - Royal Caribbean Cruises Ltd. – Bearish option traders clawed-aboard global cruise company, Royal Caribbean, today despite the 0.5% increase in shares during the trading session to $24.24. A large-volume risk reversal in the June 2010 contract indicates rougher seas could cloud RCL’s horizon. One investor sold 20,000 calls at the June 30 strike for an average premium of 1.70 apiece, spread against the purchase of the same number of put options at the lower June 20 strike for 2.25 each. The net cost of the reversal amounts to 55 cents per contract. The investor responsible for the trade is likely long shares of the underlying stock. If this is the case, the long put position established today, provides downside protection beneath the effective breakeven point at $19.45. Conversely, if shares surge during the next seven months, the underlying stock position will be called away from the trader if shares exceed $30.00 by expiration in June.

GE - General Electric Co. – A sold straddle on General Electric this afternoon indicates one investor expects shares to settle at $16.00 by expiration in June of 2010. Shares edged slightly lower by less than 0.50% to $15.88 in late afternoon trading. The trader looked to the June 16 strike to sell approximately 5,000 calls for a premium of 1.61 apiece and 5,000 puts at the same strike for 1.89 each. The gross premium pocketed by the investor amounts to 3.50 per contract. The trader keeps the full 3.50 premium on the straddle if shares center at $16.00 through expiration. The investor may take profits ahead of expiration by buying back the short straddle for less than 3.50 per contract. Premiums on both calls and puts are elevated today because of the 6% increase in option implied volatility on the stock to 35.50%. The trader benefits from lower volatility on GE and from eroding time value of option premiums. Both factors drag option premiums lower and allow the trader to buy back the straddle in a profitable manner.

YHOO - Yahoo!, Inc. – The 0.5% decline in shares of the internet company to $14.93 did not deter one investor from taking a bullish stance in the April 2010 contract today. It appears the trader put on a ratio call spread to position for a rebound in shares by expiration. The investor purchased 2,500 calls at…

I hope you all had a great weekend. Well, the markets are in a tizzy over Dubai and shopping (or the lack thereof). I would not say that Dubai is the other shoe that the bears were waiting to drop. However, it has heightened the fear that if another country, for example ...

Editor Teal Linde won’t be celebrating Thanksgiving today. But maybe he should -- his Linde Equity Report is having a thanks-worthy year, writes Peter Brimelow.

Analysts from Stifel Nicolaus have raised the rating of Royal Caribbean Cruises (NYSE: RCL) to buy on account high revenue expectations from their newest & largest ship Oasis.

On board the ship, analysts interacted with senior management of the company and more then 2000 travel agents, all of whom were of the view that for at least the next 8 months the ship will command premium price.

The company believes that though Q4 of financial 2009 can be weak, but next quarter & FY10 will be much better for the company. According to the management, booking volumes & pricing have been rebounding & they have high hopes on Oasis & solstice class ships to bring high revenue for the company going forward.

The company which sources passengers from more then 175 countries said that the demography of its clients are changing & the company is expecting to get around ~50% of is customers from Non US countries by FY12. Management's goals for the foreseeable future include continued cost cutting, international expansion, and driving pricing premiums with new/superior hardware.

Analysts believe that once the market improves and revenue start flowing the company’s profitability will largely increase on account of current steps in cost management. The company does not plan to increase its fleet currently as it feels that increased supply can cause pressure on top line.

Stifel Nicolaus has maintained its buy rating on the company and has set a target price of $28 (13.7x 2011 EPS estimate), their major rationale being attractive investment due to stabilizing fundamentals, ongoing cost containment efforts, and cruising still representing an under-penetrated vacation alternative.

Not everyone is on the buy side.

Royal Caribbean Cruises (NYSE: RCL) opened at $23.86. So far today, the stock has hit a low of $23.76 and a high of $24.25. RCL is now trading at $24.16, up $1.04 (4.5%). Over the last 52 weeks the stock has ranged from a ...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by RothmanResearch.com.

Royal Caribbean Cruises Ltd. (RCL) announced that it has entered into a partnership with Shanghai International Port (Group) Co. Ltd. (SIPG) to develop and expand the Chinese cruise market. The Memorandum of Understanding is supposed to build up long term partnership between the two companies, focusing on cruise operations, marketing, staffing and sharing management experience. Pursuant [...]

(RCL) Royal Caribbean Cruises Limited Signs Partnership Agreement

Royal Caribbean Cruises Ltd. (RCL) announced that it has entered into a partnership with Shanghai International Port (Group) Co. Ltd. (SIPG) to develop and expand the Chinese cruise market. The Memorandum of Understanding is supposed to build up long term partnership between the two companies, focusing on cruise operations, marketing, staffing and sharing management experience. 

Pursuant to the partnership agreement, Royal Caribbean will train and develop new staff and improve quality of service, besides upgrading infrastructure at the port. 

The partnership is also a step by Royal Cruises to expand its presence in the Asia-Pacific Region. Royal Caribbean, the second largest cruise company in the world, expects revenues from international operations to form a major chunk of the total revenues. 

Cruises have gradually gained acceptance from Chinese tourists as a new vacation product, and after several years of marketing promotion by some famous international cruise companies, the Chinese cruise tourism market is showing great potential. Moreover, the upcoming international event, the 2010 Shanghai World Expo would attract more international cruises to China. 

Amid the global financial crisis, world cruise giant Royal Caribbean International is operating new routes by taking Shanghai as their home port, thus offering more voyage options for Chinese guests, in sync with the company’s long-term plans.
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