Carnival Corp (CCL)

Mar 24, 2021Trade Ideas

So much for the recovery in cruise stocks.

The Centers for Disease Control and Prevention (CDC) just said it’s “conditional sailing order” will remain in effect until November 1. While the cruise industry is pressing the US CDC to lift its decision by at least July, it doesn’t appear likely. Not helping, Europe is facing another wave of cases, with some countries introducing new restrictions.

In addition, according to CNN, “The worsening situation in Europe is becoming a cautionary tale for the United States. The variant causing a renewed crisis across the continent is also spreading fast in the US. The US Centers for Disease Control and Prevention has projected it will become the dominant strain in the United States by the end of this month or early April.”

In short, as badly as many of us want to go on a cruise soon, it’s not likely.

Cruise investors aren’t too pleased either, as RCL, CCL, and NCLH drop on the news. With further pullbacks likely, investors may want to consider a put option such as the CCL May 21, 2021 25 put at market prices. CCL could fall to at least $20, worst case.

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