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Coca Cola  
About The Company

2011 Fundamentals
Market Capitalization $143.9B
Revenue (FYR) $35.1B
EPS $5.05
P/E Ratio 12.4x
Shares Outstanding 2.3 B
Book Value $13.53
Dividend: $1.88

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.

 
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  COCA COLA STOCK  - 2011
COCA COLA STOCK SYMBOL - KO
ONGOING EVALUATION & TRADE - Year 3

This will remain an ongoing trade. The chart on Coca Cola shows a strong company with excellent 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 on Coca Cola Stock. Should Coca Cola stock fall too low making covered call selling impractical I will add to my stock position through selling puts to lower my overall cost and average into the stock at lower prices. This is a long term trade. Over the past two years I have been using a reverse ladder approach when selling Coca Cola Stock Options. This is selling puts at lower strikes the further out I go in time. This protects in the event the stock has a major pullback and I end up being assigned on the way down. It would put me into the stock at an average lower price. This being the third year of my Coca Cola Stock option trade, I can afford to become more aggressive with my strike choices and stay closer to at the money rather than far out of the money puts.
Looking at the fundamentals, if you flip back to the 2009 Coca Cola trades, you can see the increase in earnings, market cap, earning per share and Coca Cola dividend. The P/E is up slightly but overall this is the kind of fundamentals I like to see, annual increases in worth, dividend and a low PE.
KO TRADES BY YEARS
VIEW KO 2011 TRADES
VIEW KO 2010 TRADES
VIEW KO 2009 TRADES
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CURRENT U.S.
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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%
   
YEAR 3: 2011
Goal for 2011: 12%
Strategy: Sell Naked Puts Until Assigned
 
Capital Currently In Use 38522.75
Income Earned in 2011 7469.25
2011 - Annualized Return On Capital 24.61%
TOTAL INCOME EARNED TO DATE 26842.00
Total Of My Own Capital Required 11680.75
Number Of Shares if assigned 700
Share Price Valuation
(Total Capital Required/Number of shares)
16.69
TRADE COMMENCED May 1 2009
GOAL FOR 2011: 12%

ONGOING STRATEGY - SELLING NAKED PUTS UNTIL ASSIGNED
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW
Oct 15 10 59.90 STO 5 NP JAN 57.50 @ 1.35     13.25   28763.25 661.75 2.30 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 Naked Puts for better premiums.
Nov 5 10 62.29 BTC 5 NP JAN 55 @ .23     13.25     (128.25) (0.41) 18363.25
Nov 10 10 62.55 STO 2 NP JAN (12) 55.00 @ 2.81     9.50   11009.50 552.50 5.01 18915.75
Dec 7 10 64.20 BTC 5 NP JAN 57.50 @ .14     13.25     (83.25) (0.24) 18832.50
Dec 7 10 64.20 STO 5 NP Jan 62.50 @ .68     13.25   31,263.25 326.75 1.04 19159.25
Dec 31 10 65.50 STO 5 NP Feb 62.50 @ .61     13.25   31,263.25 291.75 0.93 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.
    13.25     (78.25) (0.20) 19372.75
    Carry Forward from 2010 $19,372.75                
Feb 18 11 64.55 Expiry 5 Naked Puts Feb $62.50 expired                
Mar 16 2011: Last October Coke was around $60.00 and I was selling the $57.50 put. With today's pullback I was able to sell April $60 put strike for a 1.5% premium. The chart on Coke looks poor, but it's more because of the market condition than Coke itself. I sold just 3 naked puts and will sell another 3 should the opportunity present itself for better premiums, if the stock falls lower. So how low could KO fall? The pullback for Coke has been very dramatic all week. The stock has fallen right through the 50 day, and now the 100 day EMA. The stock has broken support which sat around $62.50. The next major support is at $60.00

I sold just 3 naked puts for April. If the stock falls through $60.00 there is not much support until around $55.00 to $57.50. The chart below is for the past year. $60.00 marks the 200 day EMA at the present time. I would love to sell the $55.00 naked put again on this stock and I may yet get the opportunity. At present I am hold Jan 2012 55.00 naked puts and now the April $60.00.  You can see that a pullback to $57.50 or even $55.00 will take the stock back to September 2010 and could mark a lower trading range for Coke. With a dividend of $1.88 - that would mark a yield of 3.4% at $55.00. I would think there should be good support at those levels. If KO breaks through $60.00 then it may be an easy drop to $57.50. I am holding the remaining puts back to see where the stock heads from here.

 

Mar 16 11 61.55 STO 3 Naked Puts April 60 @ .90  expired     10.75   18010.75 259.25 1.43 19632.00
Mar 17 11 62.20 Bought 300 shares @ $62.20
Comments: Today I am committing my capital earned and purchasing 300 shares. I believe the trend is back up for Coca Cola and I will hold my shares for a week or so and see at what price I can sell at.
300   7.00 (18667.00) (18667.00)      
Apr 1 2011: No April Fool's Joke today, I sold my Coca Cola Shares. I am continuing to hold my April 60 naked puts. At $60.00 Coke is fairly valued and I would be content to own it. 

 

Apr 1 11 67.34 Sold 300 shares @ $67.34 0   7.00 20195.00 0.00 1528.00 8.1 21,160.00
Apr 15 2011: I am still holding 3 naked puts for Jan 2012 at 55.00. I don't like any of the at the money puts on KO. I would prefer the 62.50 put. Looking at the stock it has had a fast run up. MACD is indicating that the stock may have topped here for a bit. I will wait for a pullback in KO or see what premiums are like for June $62.50 on Monday.

 

Apr 15 11 68.01 Expiration 3 Naked Puts Apr 60 expired                
APR 26 2011: COCA COLA MISSES BY 1 CENT

Earnings were .86 cents per share for the quarter and the consensus was for .87 and the stock sold off to 65.81. It wasn't really the 1 cent miss, it was the fact that the CEO Muhtar Kent, said "I am pleased with our first quarter results. Despite ongoing global geopolitical challenges," That's all it takes some times. Remember the market is run by fear. Fear of missing a rally and fear of being caught in a downturn. It's like US President Roosevelt said during the depression, "The only thing we have to fear is, fear itself" and for stock and commodities markets, that pretty well sums it up every day.

I jumped in and sold some JUNE $62.50 puts as I remain risk averse to selling at the $65.00 strike. I would love to sell the 65 strike but each time the stock gets up there, it has trouble. The return for the JUNE $62.50 naked put is slightly less than half a percent a month, but if there is some more selling in KO, it could easily fall back to around $62.70 as it was just a month ago. I will take advantage of any further weakness and keep selling naked put contracts to build up a position, whenever the opportunity arises.

Remember my strategy of earning 1% a month on my entire portfolio: Some naked puts generate higher returns like Nucor and other stocks such as KO, generate less but are more stable. Read about my strategy and how I implement it again here, if you have not already.

 

Apr 26 11 65.89 STO 5 naked puts JUN $62.50 @ .53     13.25   31,263.25 251.75 0.80% 21,411.75
May 23 11 67.90 BTC 5 naked puts JUN $62.50 @ .11     13.25     (68.25) (0.21) 21,343.50
MAY 23 2011: . Today's selling presented an opportunity. I bought to closed by June $62.50 puts so I could use the capital to apply to selling 8 naked puts for JULY $65 at 0.85. I realize looking at the chart that $65.00 is in the high range, but with Coca Cola I do not believe it is yet over valued and with it trading at 13X earnings and earnings being so good, I believe this is a great strike. Should I be assigned, my actual cost basis is $37.51 due to the large amount of income I have made over the past 2 years.

 

May 23 11 67.24 STO 8 Naked Puts JUL $65 @ .85     17.00   52017.00 663.00 1.27% 22,006.50
Jun 1 11 67.00 BTC 8 Naked Puts Jul $65 @ .92     17.00     (753.00) (1.44) 21,253.50
JUNE 8 2011 I bought to close my 8 naked puts for July on June 1, as it seemed obvious to me that Coca Cola would pull back. Today I went back in and sold a small reverse ladder of puts, selling the Aug $60.00; $62.50 and $65.00. The majority of the puts are at the $62.50 strike. I am still holding January $55.00 puts. I believe looking at the past 3 years in Coca Cola that the stock has a good chance of ending up somewhere between $55.00 and $60.00 during the second half of the year. There could easily be a rally in the fall. My plan is pretty straight forward. If the stock pulls back to $60.00 by August, I will be rolling out my reverse ladder into the fall and I will reduce the number of contracts in the roll. If the stock falls 10% to reach $60.00, then put premiums will be larger going into the fall, allowing me a very good profit to do my rolling forward of these puts. Meanwhile with the amount of capital earned since starting the trade two years ago, combined with the capital now being used, would afford me 1200 shares at a cost basis of $42.51 if I was assigned on all shares. Meanwhile I look forward to more volatility to increase premiums in my August puts. 

 

Jun 8 11 65.10 STO 5 Naked Puts Aug $62.50 @ 1.02     13.25   31,263.25 496.75 1.58% 21750.25
Jun 8 11 65.10 STO 3 Naked Puts Aug $60 @ .54     10.75   18,010.75 151.25 0.83% 21,901.50
Jun 8 11 65.10 STO 2 Naked Puts Aug $65 @ 1.95     9.50   13,009.50 380.50 2.92% 22,282.00
AUG 4 2011 I bought to close all my August puts and luckily since I had sold these puts so far out of the money all the puts left me with a profit. I have closed now not so much in case the stock falls but to free up cash in the event that the stock falls further and I want to sell puts or naked calls at a lower level. Right now though I kind of doubt the stock will fall much further for a few days. I am still holding my January $55.00 puts since that would be an excellent price point to enter Coca Cola should it fall that low.

Today Coca Cola Stock fell through the 100 day. The 200 day is down just below $65.00. I don't think the stock will get there overnight but in a bear market I think it is bound to happen. Back in mid-March the stock fell below $62.00. That will be my price point to wait for.

Coca Cola Stock Chart - Aug 4 2011

 

Aug 4 11 66.15 Bought to close 3 Naked Puts Aug $60 @ .15     10.75     (55.75) (0.31) 22226.25
Aug 4 11 67.70 Bought to Close 5 Naked Puts Aug $62.50 @ .28     13.25     (153.25) (0.49) 22073.00
Aug 4 11 67.67 Bought to close 2 naked puts Aug $65 @ .67     9.50     (143.50) (1.1) 21929.50
AUG 9 2011 After yesterday's market collapse I thought today might prove eventful for some of my favorite stocks and Coca Cola turned out to be one of them. I sold the Sept $60.00 for $1.10

Coca Cola Stock - August 9 2011

 

Aug 9 11 63.70 Sold 4 Naked Puts 17SEP11 $60.00 @ 1.10     12.00   24012.00 428.00 1.7% 22357.50
Sep 16 11 71.23 Expiry: 4 Naked Puts Sep $60 expired                
Sep 22 11 66.85 Sold 8 Naked Puts 22OCT11 $62.50 @ .88     17.00   50017.00 690.75 1.3% 23048.25
Oct 21 11 68.19 Expiry: 8 Naked Puts Oct $62.50 expired                
Nov 21 11 65.95 Sold 5 Naked Puts 19JAN13 $55.00 @ 3.20     13.25   27513.25 1586.75 5.8% 24635.00
Nov 28 11 64.90 Sold 20 Naked Puts 17DEC13 $62.50 @ .70     32.00   125032.00 1368.00 1.0% 26003.00
Nov 28 11 64.90 Sold 10 Naked Puts 21JAN12 $60 @ .70     19.50   60019.50 680.50 1.1% 26683.50
Dec 9 11 67.57 BTC 20 Naked Puts 17DEC13 $62.50 @ .03     32.00     (92.00) (0.07) 26591.50
Dec 14 11 66.30 Sold 10 Naked Puts 21JAN12 $62.50 @ .41     19.50   62,519.50 390.50 0.62% 26982.00
Dec 30 11 69.90 BTC 10 Naked Puts 21JAN12 $60 @ .04     19.50     (59.50) (0.09) 26921.50
Dec 30 11 69.90 BTC 10 Naked Puts 21JAN12 $62.50 @ .06     19.50     (79.50) (0.13) 26842.00
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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