Price Forecast:

Bullish Case: RCL's demand remains robust due to successful fleet expansions and new offerings. Implied volatility is stabilizing, indicating confidence in managing operational challenges, boosting price potential. Significant upcoming itineraries may enhance consumer interest and revenue.

Bearish Case: Economic uncertainties combined with mixed consumer feedback on policy changes could hinder booking levels. Rising operational costs and competitive pressures might negatively impact returns, reflected in elevated implied volatility for certain strike prices.

Potential Outcomes:

• Strong holiday bookings boost revenue (60% probability).
• Continued policy backlash affects customer sentiment (25% probability).
• Market-wide economic downturn reduces discretionary spending for cruises (15% probability).

Trading Oracle: Consider a bullish debit spread by buying RCL 250 call and selling RCL 255 call with January 2025 expiration. This captures expected upside from upcoming earnings and holiday demand while leveraging low implied volatility to optimize return potential.

December 11, 2024