Early bearishness in Royal Caribbean (NYSE: RCL)

A Royal Caribbean Cruises Ltd. (NYSE: RCL) options investor loaded up on later-dated puts out of the gate this morning likely to protect against potential slides in the stock.

At 10:03 a.m. EST, a single block of 20,000 June 27 puts changed hands for the ask price of $1.05 per contract. These puts are home to current open interest of 604 contracts, indicating this trade was initiated to open and most likely occurred on the buy-side. The investor who bought these puts will make money if RCL shares close lower than $25.95, which represents a 17% drop from the stock’s current level.

Keep in mind that while this trade seems bearish, the investor could be buying downside protection to hedge against a long stock position. By doing this, the investor could benefit from any pop-up in the stock throughout the later-term, but protects against any potential slides in the stock by purchasing the June 27 puts. Additionally, if the stock drops significantly throughout the next few months, the investor could choose to sell back the puts and take profits instead of holding on to the options until June expiration.

RCL did not announce any news today, and the company could announce earnings sometime around April 22. RCL shares are currently trading down 16 cents to $31.46.

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