Bullish trade on a Shipping Company

January 26, 2022 - 1:23 pm

We've been following shares of a global, Israel based shipping company called Zim Integrated Shipping Services recently, and we're very positive on the trend and operation in the company. They're expanding, adding capacity, and margins and growth seem to be solidly in an uptrend.

The company went public in US markets in Feb 2021, around $10/share, and recently traded around $59, putting up an impressive first year return to shareholders.  While owning the shares is a good investment, we're putting on an option trade on the company.

With shares trading around $60/share, we are purchasing the January 2023 $65 strike Calls for $7.80, and selling the same expiration $40 Puts for $7.70 for a net cost of $0.10 on the trade per set of options.  The options are thinly traded on ZIM, and therefore the bid/ask spread is larger than we'd like to see.