The airlines have all reported and have had a nice run along with the whole leisure industry.
Names such as American Airlines (AAL) and Delta Air Lines (DAL) have moved higher along with even the cruise lines like Norwegian Cruise Line (NCLH) and Carnival (CCL) .
The run-up is over, however.
It is probably time to take the other side of the run they have had. In addition to the run-up, implied volatility (IV) has really fallen off in the group, to the point that options on these names are now pretty darn cheap.
The November $14 puts in AAL cost less than $0.70. They are a buy, in my view.
Trade:
Buy to open AAL Nov. 18 $14 puts for $0.69.
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Let's see why a shipping stock could prove there's a 'cold hand fallacy' as well.
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