Carnival Corp (NYSE: CCL - option chain) shares are rising today after the company announced this morning that it will resume stops at Mexican ports now that health officials have lifted advisories against non-essential travel to the nation. CCL also said the H1N1 Influenza scare will likely reduce second-quarter earnings by 5 cents per share. While that isn't a good thing, investors often prefer to know how bad the news instead of having to guess. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CCL.
CCL opened this morning at $26.18. So far today the stock has hit a low of $25.81 and a high of $26.60. As of 11:35, CCL is trading at $26.41 up 1.41 (5.6%). The chart for CCL looks bearish and S&P gives CCL a negative 2 STARS (out of 5) sell ranking.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $17.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just two months as long as CCL is above $15 at July expiration. Carnival would have to fall by more than 43% before we would start to lose money. Learn more about this type of trade here.
CCL has not been below 17.50 since March and has shown support around $23 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CCL.
Cramer on BloggingStocks: Investors are rethinking their snap judgments 
Lions Gate Entertainment: Still waiting for cash flow
Before the bell: Stocks ready for a lower open after reaching 13-month highs
