ROYAL CARIBBEAN CRUISES: Obstacle Cruise (UPDATE II)

We have not hit the iceberg yet, so why not continue the instructive cruise?

Executive Summary

• We celebrate our second trade update, most likely the last.

• We again add more credit & time and reduce total risk.

• If we are lucky, we can still book a small profit; or we will close with a damage-controlled loss in December or January.

• Captain Ahoy!

1. Recap Situation

OK sailors. Listen up. This cruise isn’t over yet. Instead, it is giving us the opportunity for a textbook-style second-degree trade update lesson.

How to roll a trade for the second time on an underlying asset that does not want to look back. As if Royal Caribbean Cruises never came across the concept of mean reversion.

We apply the same concept as the first trade update. We roll into the next month for more credit, time, and reduced risk. If it had not been possible to roll for a credit, we would have either cut the losses and closed the trade or let it run until maturity to get a more positive or more negative result; only the captain knows.

Check out the original BrainDoζer UPDATE below.

RCL: Obstacle Cruise (UPDATE)

2. Why Now?

It i…