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Carnival (CCL – 22) is the world's largest cruise operator, in charge of five different cruise lines. Last Friday, the equity surged over 14 percent after being upgraded from an "attractive" to a "buy" rating by PaineWebber Group. Additionally, the shares may have benefited from news that a smaller, privately held competitor is throwing out its anchor and ceasing operations.
Despite this recent boost, CCL remains 57 percent off its annual highs and nearly 60 percent away from its all-time peak. The stock is still well below its 10-month and 20-month moving averages.
Yesterday, CCL saw extremely heavy option volume transpire on the January 25 call, as 5,278 contracts traded. On an average day, just under 600 contracts are traded on this out-of-the-money option. This activity ultimately boosted call open interest at this strike from 1,950 to 7,235 contracts. A block of 5,250 contracts traded shortly before the close yesterday. This volume came across the tape "late," making it impossible to determine whether it was traded near the bid or the ask price. CCL is down fractionally in late-morning activity.