RCCL Stock question

[mikepmcm]

sorry I hate to say it but..$50 OBC isnt really worth RCL stock. Considering how much it goes up and down and there is no real draw to this stock, I think ill just save room in my portfolio for something else.

 

If you really want the $50 lay down the 2700 on some roulette.

 

just my .02c of cruise critic forum credit.

 

I guess it depends on what price you bought the stock for. If you bought high at $45 a share it would suck. I'm killing myself for not buying at it's low at $20, but I did buy at $23 and stock has been hovering around $27. So right now I'm happy with a $500 gain in the stock and $100 OBC.(thats a 22% return on your dollar).

[mikeerdas]

Thanks folks.

 

> Bought 100 shares and sold a Dec $25. call and intend to sell come Dec

 

Sorry, I'm not understanding the put/call thing. My knowledge about individual stock purchases goes no further than market and limit orders. Could you explain this a bit more?

 

> This is what you could do at present stock price which was about $27.50

> at Friday close. Purchase 100 shs cost $2760 incl brokerage.

> Sell 1 December $25.00 call receive $470.00 after brokerage.

 

You lost me there. I'd have bought 100 shares at $27.50 and am doing what transaction in December? Sell one what (stock?) in December, or do you mean sell on December 1st, etc? Sorry, I'm lost.

 

> Net cost of shares $2290. or $22.90 per share cost basis.

> If stock is lower than $22.90 on Dec 19th then you will be in a loss

> position If stock is above $25.00 Dec 19th the holder of the call will

> oblige you to sell your shares at $25.00 and you will have received in

> total $2970. and will have a profit of about $200. In addition you will

> have the $200 OBC and possibly a $15.00 dividend

 

Seems a little murky to me, but I've never used calls and puts before. What about buying at current prices, then simply selling if the price goes up by a certain threshold (after the OBC is used). Then repurchasing in the future if I need / want to?

 

The stock seems fairly volatile. A peak of ~$54 (?) in 2003 long after the stock market bubble had burst? So perhaps there are good opportunities for buying/selling the same amount of shares repeatedly over time. Of course this assumes the brokerage fees and any short-term capital gains make it all worthwhile.

 

How does RCL compare with CCL? All I can tell is that RCL currently has a lower P/E ratio (8.6) than CCL (13.4) and a 5.4 billion market cap. vs. CCL's market cap of 30.8 billion--meaning, I suppose, that CCL is ~6X larger than RCL? Or at least valued 6X more? Sorry, individual stocks aren't my strong point. I prefer low-cost index mututal funds for just about everything, with a little bit of active management (by fund managers) thrown in.

 

Any do any of the smaller luxury cruise liners not already owned by CCL or RCL sell stock?

[cruisenfever]

sorry I hate to say it but..$50 OBC isnt really worth RCL stock. Considering how much it goes up and down and there is no real draw to this stock, I think ill just save room in my portfolio for something else.

 

If you really want the $50 lay down the 2700 on some roulette.

 

just my .02c of cruise critic forum credit.

It's more than $50 for people who like to take longer cruises.

 

$ 50 for sailings of 5 nights or less

$100 for sailings of 6-8 nights

$200 for sailings of 9-13 nights

$250 for sailings of 14+ nights

 

It's an investment that you make and forget about. The OBC benefit is tax free money.:D

[dgcruises]

Thanks folks.

 

> Bought 100 shares and sold a Dec $25. call and intend to sell come Dec

 

Sorry, I'm not understanding the put/call thing. My knowledge about individual stock purchases goes no further than market and limit orders. Could you explain this a bit more?

 

Sure. When you sell a call you are entering into a forward agreement to sell your shares in 100 share multiples at a specific price. The agreement has an end date after which the purchaser of the call has no further right.

 

You presently own 100 shares which you purchased at $27.50. and presently you are down a couple of dollars. If at the same time you bought the stock you had sold a call (given someone the option to buy your shares at $25.00 until Dec 19 ) at say $4.00 this would be yours to keep and would have the effect of reducing your cost to $23.50 but if the stock was trading at above $25.00 you would have to sell at that price. This would mean your maximum potential gain would be $1.50 but on the flip side you would not lose on your investment until the share price dropped to below $23.00.

 

An option strategy should only be used if you understand them fully.

 

Yahoo has a chart showing the prices for options and here is a link to RCL option chart

 

http://finance.yahoo.com/q/op?s=RCL