Javascript DHTML Drop Down Menu Powered by Drop Down Menu
FullyInformed.com - Options and Stock Strategies For Income

SignUp For Updates 

  You are here:


Bookmark and Share
 

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.

 

 

 
Terms
Of Use
 
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  - 2010
COCA COLA STOCK SYMBOL - KO
ONGOING EVALUATION & TRADE - Year 2

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. This trade started with a reverse ladder approach of selling naked puts. I will continue that strategy during 2010.
KO TRADES BY YEARS
VIEW KO 2011 TRADES
VIEW KO 2010 TRADES
VIEW KO 2009 TRADES
ALL
PORTFOLIOS
INDEX
U.S. STOCKS
RETIREMENT PORTFOLIO
CANADIAN STOCKS

 
CURRENT U.S.
STOCK PORTFOLIO
INDEX

AT+T
CLOROX
COCA COLA
INTEL CORPORATION
JOHNSON & JOHNSON
KRAFT FOODS
MCDONALDS
MERCK & COMPANY
MICROSOFT
NUCOR CORPORATION
PEPSICO
SPYDER ETF
VISA
EXXON MOBIL
YUM! BRANDS

 
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%
   
YEAR 2: 2010
Goal for 2010: 12%
Strategy: Sell Naked Puts Until Assigned
 
Capital In Use At End Of 2010 42,250.00
Income Earned in 2010 6,477.75
Return On Capital For 2010 15.3%
   

 

 

 

TRADE COMMENCED May 1 2009
GOAL FOR 2010: 12%

ONGOING STRATEGY - SELLING NAKED PUTS UNTIL ASSIGNED
Jan 21 10 55.10 BTC 5 NP Feb 57.50 @ 2.41 (4.19)     13.25     (1218.25) 11676.75
Jan 21 10 54.67 STO 5 NP May 57.50 @ 4.30 7.4     13.25     2136.75 13813.50
Jan 21 10 55.10 BTC 1 NP Feb 55 @ .89 (1.6)     8.25     (97.25) 13716.25
Jan 21 10 54.64 STO 1 NP May 55 @ 2.65 (I moved this put so it can be added to the other 4 NPS I have for May 55 already) 4.8     8.25     256.75 13973.00
Feb 4 10 53.43 BTC 5 NP MAY 55 @ 3.25 (5.9)     13.25     (1638.25) 12334.75
Feb 4 10 53.43 STO 3 NP AUG 55 @ 4.50 8.1     10.75     1336.25 13671.00
Feb 4 10 53.43 STO 2 NP Jan 11 55 @ 6.05
COMMENTS: I am not contemplating these puts expiring worthless. I have sold these as I expect the stock will be somewhere around 52.50 to 56 by the end of this year. I will then close these for a profit.
11     9.5     1200.50 14871.50
Feb 4 10 53.43 BTC 5 NP MAY 57.50 @ 4.90 (8.0)     13.25     (2463.25) 12408.25
Feb 4 10 53.43 STO 5 NP AUG 57.50 @ 6.15 10.6     12.00     3063.00 15471.25
Feb 25 10 52.68 Bought 500 shares @ 52.68 - This purchase price is below Sep 2009 prices. I am not selling calls against these shares but looking to sell them on any rebound from today's 4% sell off for a short term profit. I usually try for .50 cents but anywhere above 53.00 I will consider selling.       7.00 ($26,340.00)      
Feb 25 10 53.12 Sold 500 shares @ 53.12 - sold at market at close. See notes below.       7.00 26,553.00   213.00 15684.25

Feb 26 2010: A little day trading now available on Coke with the news that the company is buying out the bottling division. This is a concern for many stock holders and the stock has fallen 4% as of yesterday Feb 25 2010. So how do I do day trading on a company like Coca Cola? I use the oscillator and look for oversold moments and buy at the moment. When the oversold condition appears I wait a couple of minutes and then offer to buy .05 cents lower (depending on the stock - some stock that is more volatile you can select .20 or .25 cents lower. If I get a fill on 500 shares, then I place my sell order at about .50 cents higher. I do not chase the stock up. If I get filled great, if not then I close my ticket to buy. If I get less than 500 shares and the stock moves back up I still go ahead with a sell. I will not hold overnight even if it means I sell below my purchase price. I buy in lots of 500 only.
 

As of Feb 26 2010: This is the second day I am doing day trading on the stock. As long as the volatility remains higher than normal, I will take a look at the stock. I will never buy at a higher level than the previous day's purchase. For example on Thursday Feb 25 2010, I bought in at 52.68 and then sold at the close of the day at market. I sold at market as I did not want to hold overnight. Today, Feb 26, the first oversold indicator came around 9:48 AM but the stock fell just to around 52.60 or so. Not low enough beyond yesterday's purchase price of 52.68. Then around 10:00 AM oversold conditions showed up again, I waited a few minutes and the stock hit 52.35. I went in .05 cents lower and offered to buy 500 shares at 52.30. When oversold conditions appear I am never guaranteed that the stock is not going lower which is why I always offer to buy lower than the latest price. (Coke tends not to be very volatile so .05 or .10 cents lower is fine for me. Stocks like RIM are more volatile and you can go in at .50 cents lower if you wanted.) I added .50 cents to the offer to sell and place my sell ticket at 52.80 and then watched just in case the stock moved up but not near my sell price, forcing me to sell earlier than my 52.80. I was filled at 11:04 AM about an hour later.

If the stock moved into an oversold condition near the close, I never buy in - it's too late in the day.

Remember that I am options investor first and foremost. I am not a day trader. I am just trying to add some income from an event that, in my opinion, is overdone on a quality company. Therefore I am not trying to time every trade and make sure I make money on every trade. If the stock can keep moving lower than my previous purchase price from the day before, then I am content to use the oscillator and buy for a day trade. If though, the stock remains volatile but does not fall below the previous day's purchase price, then forget it. I am not into day trading, just taking advantage of an opportunity.
Remember - nothing you read on my site is recommendations or financial advice. Make your decisions and trade at your own risk. Investing can and often does result in large losses. Be careful what decisions you make.
 

 

Feb 26 10 52.30 Bought 500 shares @ 52.30
Comments: See my notes below on day trading under FEB 26 2010 to understand what I am doing here and why.
      7.00 (26,150.00)      
Feb 26 10 52.80 Sold 500 shares @ 52.80       7.00 26,393.00   243.00 15927.25
Apr 27 10 52.67 STO 3 NP JUN 52.50 @ 1.46 2.7     10.75     427.25 16354.50
May 3 10 53.80 BTC 5 NP Aug 57.50 @ 4.25
Comments: I have closed the Aug 57.50 put and the Aug 55 put for profits. If you look at how I sold these puts, it was far out in time. While the market basically has not really gone anywhere since selling these puts, time decreasing has evaporated the option premiums on these puts providing me with a nice profit.
(7.3)     12.00     (2137.00) 14217.50
May 3 10 53.80 BTC 3 NP Aug 55 @ 3.00 (5.4)     10.75     (910.75) 13306.75
May 6 10 51.21 STO 5 NP JUN 52.50 @ 3.75 7.1     13.25     1861.75 15168.50
May 10 10 54.04 BTC 5 NP JUN 52.50 @ 1.00 (1.9)     13.25     (513.25) 14655.25
May 10 10 54.04 BTC 3 NP AUG 52.50 @ 1.90 (3.6)     13.25     (583.25) 14072.00
May 10 10 54.04 BTC 5 NP MAY 50 @ .16 (0.32)     13.25     (93.25) 13978.75
JUN 1 10 51.29 STO 5 NP AUG 42.50 @ . 47 1.1     13.25     221.75 14200.50
Jun 2 10 51.20 STO 5 NP JUL 47.50 @ .65 1.3     13.25     311.75 14512.25
Jul 16 10 52.37 Expiry: 5 NP JUL 47.50 expired                
Jul 20 10 54.70 STO 10 NP SEP 52.50 @ 1.52 1.3     19.50     1500.50 16012.75
Jul 27 10 55.00 BTC 5 NP AUG 42.50 @ .04       13.25     (33.25) 15979.50
Jul 29 2010: So where has Coke been going? Pretty well nowhere. The stock remains range bound and allows for naked put selling. Every time there is some selling, it is worthwhile to sell more naked puts and get additional premium. Right now Coke has risen slightly from a few weeks ago, but the put premiums remains fairly high for this stock, as the trend of the market is bearish. Remember that my ultimate goal is to make enough income from selling naked puts to eventually own this stock with "other peoples' money". Therefore looking at the past 6 months the perfect spot has been 52.50. Decent premiums and lots of opportunity to roll forward month after month. However, if an investor is of the mind that they do not want to be assigned, then the key would probably be the $50 strike. However the premium is small for that strike, usually being under 1%. Therefore I prefer to garner larger income by staying with the 52.50 as the plan is to own shares but not with my own capital. I have also marked with an RED X where the 10 day crossed the 20 and 30 as well as the 50 day, indicating the trend up in the stock. The next day, July 20 I sold the Sept 52.50. On July 27 I closed the August 47.50 puts. I would expect to either roll the Sept 52.50 puts or have them expire out of the money. I am hoping to stay at 52.50 for selling naked puts however I believe the market will probably rise going into the fall and this will naturally move Coke higher.
 

Sep 14 2010: ON THE EDGE AGAIN:
Just like a good movie, Coke has us on the edge of our seats again. As I indicated on Jul 29 (see below), the market has moved Coke higher. Coke at $58.64 on Sept 10 shows the stocks is flirting with its pre-crash levels again and could make a run to above the Dec 14 2009 high of $59.45. There is a lot of resistance at $61.00 and I somewhat doubt it can break through, but if the market should rally into the year end, then perhaps Coke will break that high. I am holding almost $16000 in cash made from selling naked puts. At this stage I will break up my 10 put contracts for Sept 52.50, which I am sure will expire on Friday. I am already holding 5 Jan $55.00 naked puts. I will move up to $57.50 and sell 5 for Nov and another 5 for Feb. As November approaches, should the stock pull back, I will have another opportunity to roll from November further out. By doing this roll I have increased the capital needed should I be assigned by 5000.00, but I have taken in 2063.50, effectively putting my capital at risk up by just 3000.00. This moves my break even from $42.68 to $44.64, just $2.00 higher. At $44.64 break even, I am sitting right at the high end of the low points from the collapse of 2008 - 09 which I feel is a great spot to be in. I hope to continue to reduce my cost to below $40.00. To do this I need more income which means higher premiums. I cannot stay at $52.50 and expect the get much premium. As I have already almost 16,000 in income and as by moving higher to 57.50 I am only moving up by 2.00 on my break even, I am comfortable with the move higher. At $57.50 I am also garnering a larger put premium and this will give me more room to keep rolling should Coke move higher or stay in a range from $55.00 to $59.00, which is more what I would expect unless economic conditions improve which would, I believe, push Coke above $61.00. Remember nothing on my site is trading advice or recommendations. It is information only. Investors should remember that large losses can result from risky assets such as stocks and options. Trade at your own risk.
 

Sep 14 10 57.90 STO 5 NP November $57.50 @ 1.50
COMMENTS: See my comments below for Sep 14 to understand this trade.
2.6     13.25     736.75 16716.25
Sep 14 10 57.90 STO 5 NP Feb 57.50 @ 2.68 4.6     13.25     1326.75 18043.00
Sep 17 10 57.56 Expiry: 10 NP Sep 52.50 expired                
Oct 14 10 59.90 BTC 5 NP NOV $57.50 @ .40
COMMENTS: This is roll out to Jan at the same strike. I am already holding Jan 55 strikes. With just .40 cents left on the Nov put, if KO stays around 59.00 it will lose its value quickly but so will the Dec and Jan 57.50 which is a strike level I would prefer to be at. I think at 59.90 the stock is getting overvalued so I want to sell below that level.
(0.69)     13.25     213.25 17829.75
Oct 15 10 59.90 STO 5 NP JAN 57.50 @ 1.35 2.3     13.25     661.75 18491.50
Nov 5 2010: THERE'S NOTHING LIKE COKE
Sometimes making money comes easy and Coke has been an excellent performer. Today I closed my Jan 55 naked puts which I sold back in Dec 2009 and Feb 2010. - I made $2375.50 at the time of closing, and held 27,500.00 in capital to secure the position. The Return is a very nice 8.6% for an average holding period of about 10.5 months, with not work on my part. Many people feel that selling naked puts for income means selling just one or two months out. But for some companies the long range chart offers a lot of potential for long range naked put selling.
UPDATE NOV 10 2010: To continue this trade I have sold 2 Naked Puts for Jan 55 for 2.81. I will eventually sell more but I want to wait to see if coke pulls back and honestly, I have a long time until Jan 2012 so there is plenty of time to see if KO should pullback and I can sell some more Jan Puts for better premiums.
Nov 5 10 62.29 BTC 5 NP JAN 55 @ .23 (0.41)     13.25     (128.25) 18363.25
Nov 10 10 62.55 STO 2 NP JAN (12) 55.00 @ 2.81 5.1     9.50     552.50 18915.75
Dec 7 10 64.20 BTC 5 NP JAN 57.50 @ .14 (0.24)     13.25     (83.25) 18832.50
Dec 7 10 64.20 STO 5 NP Jan 62.50 @ .68 1.0     13.25     326.75 19159.25
Dec 31 10 65.50 STO 5 NP Feb 62.50 @ .61 0.97     13.25     291.75 19451.00
Dec 31 10 65.50 BTC 5 NP Jan 62.50 @ .13
COMMENTS: This is an easy trade to decide on. The stock continues to hold to the upper bollinger and this is a simple roll from Jan to Feb at the same strike for more premium.
(0.20)     13.25     (78.25) 19372.75
    END OF 2010 EARNED = $6477.75 = 9.1%                
                     
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

 |  site map  |  privacy policy  |  contact me  |  subscribe  |  exchange links  |  the author of fullyinformed  |