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Coca Cola  
About The Company
2009 Fundamentals
Market Capitalization $114.3B
Revenue (FYR) $31.0B
EPS $2.70
P/E Ratio 18.3x
Shares Outstanding 2.3 B
Avg. Daily Share Volume (Last 10 Days) 8.2 M
Dividend: $1.64

Coca-Cola Co is a profitable Beverages (Nonalcoholic) company that trades on the NYSE. It is a manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. Finished beverage products bearing its trademarks are sold in more than 200 countries.

The Company markets nonalcoholic sparkling brands, which include Diet Coke, Fanta and Sprite. The Company manufactures beverage concentrates and syrups, which it sells to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as finished beverages, which it sells primarily to distributors.

The Company owns or licenses approximately 500 brands, including diet and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and energy and sports drinks. During 2008, the Company acquired the brands and licenses in Denmark and Finland from Carlsberg Group Beverages (Carlsberg).

In my opinion, Coke remains among the strongest of US Companies for stock holders interested in covered call and naked put writing. This looks like a good stock for my strategy.

 

 

 
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By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not access or use this site.
Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

 

 
  COCA COLA STOCK  - 2009
COCA COLA STOCK SYMBOL - KO
ONGOING EVALUATION & TRADE - Year 1

This will remain an ongoing trade. The chart on Coca Cola shows a strong company with excellent naked put selling potential. I will be selling Naked Puts until I either accept assignment OR get assigned shares. Then I will turn to covered calls. Should the stock fall too low making covered call selling impractical I will add to my stock position through selling naked puts to lower my overall cost. This is a long term trade.
Starting in 2009 I will be using a reverse ladder strategy. This strategy is using naked puts that are sold at lower strikes the further out the trades go.
KO TRADES BY YEARS
VIEW KO 2011 TRADES
VIEW KO 2010 TRADES
VIEW KO 2009 TRADES
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Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

 

 

YEAR 1: 2009 - Trade Commenced May 1 2009
Goal for 2009: 8% (8 months)
Strategy: Sell Naked Puts Until Assigned
 
Capital In Use At End Of 2009 102,000.00
Income Earned in 2009 (8 months) 12,895.00
Return On Capital in 2009 (8 months) 12.6%
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TRADE COMMENCED May 1 2009
GOAL FOR 2009: 8%  (8 Months)

ONGOING STRATEGY - REVERSE LADDER / SELLING NAKED PUTS UNTIL ASSIGNED
May 1 09 42.53 STO 10 Naked Puts Jun 45.00 @ 3.05 6.7     19.50     3030.50 3030.50
May 1 09 42.53 STO 5 Naked Puts Aug 40 @ 1.95 4.8     13.25     961.75 3992.25
May 1 09 42.53 STO 5 Naked Puts Aug 45 @ 3.95 8.7     13.25     1961.75 5954.00

May 1 2009: This is a ten year chart of KO. It has remained in a range between approximately $40.00 to a high above $60.00
Previous to this trade, I have been in KO longer than 10 years. During this time period it has consistently increased it's dividend. In 1999 it was paying .16 cents quarterly dividend. Today it is paying .41 cents quarterly. What a great performer it has been. I have included the volume chart to show how the volume continues to increase annually in this corporation. I believe it is a core holding and will work well for long term option strategy.

Coke Ten Year Chart

Jun 19 09 48.81 Expiry: 10 NP Jun 45 Expired                
Jun 22 09 48.35 STO 10 Naked Puts Jul 47.50 @ .75 1.5     19.50     730.50 6684.50
Jul 17 09 50.32 Expiry: 10 NP Jul 47.50 expired                
Aug 3 09 48.63 Sell 10 Sep $47.50 puts @ .75 1.5 0 46.77 19.50 0 0 730.50 7415.00
Aug 24 09 49.06 Expiry: 5 NP Aug 40 and 5 NP Aug 45 expired                
Aug 26 09 49.07 Sell 5 Nov $45.00 puts @ .70 1.5 0   13.25 0 0 336.75 7751.75
Aug 26 09 49.07 Sell 5 Jan $40.00 puts @ .45 1.1     13.25     211.75 7963.50
Sep 18 09 53.76 Expiration: 10 Naked Puts Sep 47.50 expired   0     0 0    
Sep 24 09 52.41 Sold 10 Naked Puts Feb $45.00 @ .70 1.5 0   19.50     680.50 8644.00
Nov 20 09 57.48 Expiry: 5 Naked Puts Nov 45 expired                
Nov 27 09:Update:  Since early Nov 2009 the stock has taken off and is setting new 52 week highs. How can I decide where to sell my naked puts. My original strategy of selling below 50.00, is now difficult as there is very little premium. However, the question is, should I be concerned about writing the puts higher up or should I follow the stock? What steps should I take. Here is what I do:

A) Look at the chart above. It is from Jun when the stock shot up from 45. I would say  the stock is a little over valued at 57 and 58 dollars. I have drawn a red line indicating that if there is a pull back I would expect it to be around the 56 area. The green line shows a fair value of around 53.00.

B) The second chart above is a 3 year chart. It goes back beyond the credit crisis. Looking at the three year chart I can draw a line at the 50.00 strike which seems to be fairly strong support and the 53 which is the upper range before the break out in 2007 and again this year. Therefore I feel fairly confident that if there is a pullback, the 53.00 strike is a good point for writing covered calls.
C) I will want to keep my break even around the $50.00 value. To do this I am writing a variety of put strike positions. The graph below show the various support levels and resistance values for Coca Cola. Again, this supports my selling naked puts around the 53.00 strike. That will put me between the 80 day support and 15 days support prices.

 

Nov 27 09 56.88 (STO) Sold 5 Naked Puts May $50 @ 1.00 2.0     13.25     486.75 9130.75
Nov 27 09 56.88 (STO) Sold 5 Naked Puts Jan 52.50 @ .35 .66     13.25     161.75 9292.50
Nov 27 09 57.05 (BTC) Closed 5 Naked Puts Jan 40 @ .05 (0.12)     13.25     (38.25) 9254.25
Dec 23 09 57.05 BTC 10 Naked Puts Feb 45 @ .06 (0.13)     19.50     (79.50) 9174.75
Dec 24 09 57.35 BTC 5 Naked Puts Jan 52.50 @ .06 (0.11)     13.25     (43.25) 9131.50
Dec 24 09 57.35 STO 5 Naked Puts Feb 57.50 @ 1.59 2.76     13.25     781.75 9913.25
Dec 24 09 57.30 STO 4 Naked Puts May 55.00 @ 1.94 3.5     12.00     785.50 10698.75
Dec 24 09 57.30 STO 3 Naked Puts Aug 52.50 @ 2.12 4.0     10.75     825.25 11524.00
Dec 24 09 57.33 STO 3 Naked Puts Jan (2011) 55 @ 4.38
COMMENTS: I have sold these not with the intension of them expiring worthless. I have sold these as I expect by the end of 2010 that Coke will probably be around 52.50 to 56 and I will close these for a profit.
7.9     10.75     1303.25 12827.25
Dec 31 09 57.00 STO 1 NP Feb 55 @ .76 1.3     8.25     67.75 12895.00
    End of 2009 - $12895.00                
KO TRADES BY YEARS
VIEW KO 2011 TRADES
VIEW KO 2010 TRADES
VIEW KO 2009 TRADES

 

 

 

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

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