ROYAL CARIBBEAN CRUISES: Obstacle Cruise (UPDATE)

We are indeed dealing with the Titanic and keep cruising.

Executive Summary

• We celebrate our first trade UPDATE.

• Implied volatility contracted, yet more time is needed for a price retrace.

• We add more credit and time while reducing risk.

1. Recap Situation

This is our first MacroDoζer trade UPDATE. I feel like we have to celebrate. Firstly, all other trades had been successful up to this point, with no adjustments needed. Secondly, you and all the other BrainDoζer Street-Sharps get to see how to roll an option contract and adjust the trade for more credit, reduced risk, and additional time.

A quick recap of the situation.

We are trying to steer the Titanic by selling premium on the cruise company Royal Caribbean (RCL) via a risk-defined strangle (iron condor). Implied volatility was close to 100%, and premium selling seemed reasonable. A contraction of implied volatility played into our hands; however, the underlying price went ahead of itself and didn’t look back since.

Check out the original BrainDoζer below.

RCL: Obstacle Cruise

2. Why Now?

Parts of our underlying …