Options Brief: Coca-Cola (KO)

KO – The Coca-Cola Company – Shares of the world’s largest soft-drink maker are up 1.70% to stand at $54.15 as of 12:40 pm (ET) after earlier rallying as much as 2.90% to an intraday high of $54.78. The price per share of the Coke manufacturer increased after the firm revealed in its second-quarter earnings report that it sold more beverages in every part of the world save Europe. KO posted second-quarter net income of $1.06 a share, excluding a charge for restructuring, which beat average analyst expectations of $1.03 per share. One bullish options player appears to be rolling a sizeable long, previously established call position in the August contract to a higher strike price in the November contract. It looks like the investor sold 15,000 calls at the August $55 strike at a premium of $0.60 per contract in order to purchase the same number of calls at the November $57.5 strike for a premium of $0.75 apiece. The net cost of the transaction amounts to $0.15 per contract. The fresh long call stance positions the bullish player to make money should KO’s shares rally another 6.45% over the current price of $54.15 to surpass the effective breakeven point to the upside at $57.65 by expiration day in November. Shares of Coca-Cola Co. last traded above $57.65 back on December 31, 2009.

About Andrew Wilkinson 1023 Articles

Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

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