Stocks

Carnival Stock Is Attractive to Long-Term Call Option Buyers

Buying long-term CCL LEAPs and selling short near-term puts is a good play for value investors

Photo by Cody McLain on Unsplash

Carnival Corp (CCL) is an attractive stock worth buying here, as I described in a recent article:

Dec. 20, 2024, Barchart.com article:

Carnival Corp Generates Huge Free Cash Flow for its FY 2024 - CCL Looks Undervalued

The article was based on Carnival’s recent fiscal year (ending Nov. 30) results, released today (Dec. 20, 2024).

I argued that, based on its free cash flow (FCF), CCL stock is now worth over $33.53 per share.

CCL closed at $26.80. That means the buying CCL stock has over 25% upside for a long-term investor.

However, there is a way to leverage this upside, without much more risk.

How to Play This with LEAPs

One way to do this is to buy deep-in-the-money (ITM) call options.