I bought another long put.
music selection: “For Celebrations Past” — Screaming Trees
The cruise industry is beset by problems due to COVID-19. Most of the ships are not sailing and those that are happen to be in less lucrative markets and are half full. I’m betting against the second largest operator. RCL has a cash burn of about 200 million a month. They will run out of cash by November or December at current rates. In the unlikely event they can open soon, they will have additional sanitation expenses and probably half or less capacity for social distancing. There doesn’t seem to be a rational path to return to profitability.
I bought RCL220121P00045000 for $17.95 per share this morning. The trade has 548 days till expiry. I’ll probably be looking to exit before then unless it is clear the company is approaching bankruptcy.
I have an ask in the market at 15.75 for my VXX puts ($1,100 in profit). The current bid is 15.15 with 133 contracts bid at that price. I might actually get a fill today. In that case I’ll roll down and be back with another update post.
Devour your prey raptors!