KO – Coca-Cola Co. – One bullish player appears to be rolling a sizeable position in call options up to a higher strike price today in order to position for continued appreciation in the price of Coca Cola’s shares through January 2011 expiration. Shares of the beverage maker are up 0.55% to stand at $57.88 as of 11:15 am ET. It looks like the options investor sold 10,000 now in-the-money calls at the November $57.5 strike for premium of $1.75 apiece in order to purchase the same number of calls at the higher January 2011 $60 strike at a premium of $1.17 each. In isolation, net profits enjoyed on the trade amount to $0.58 per contract. It is likely that the investor responsible for today’s transaction originally purchased the November $57.5 strike calls as part of a similar calendar roll back on July 21, 2010, wherein he rolled calls up from the August $55 strike to the November $57.5 strike. The beverage-bull is hoping to see KO’s shares extend gains through the start of next year.
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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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