KO Analysis

The Coca-Cola Co, (KO)

Update 7/26/2017: KO whipsawed within a dollar’s range after earnings were published. In order to clear space in my account for further trades, I exited below target at 17% of maximum potential profit.

Shares showed a net declined of 0.6% over my holding period of less than a day, or a -211% annual rate. The options position produced a 20.0% yield on debit for a +7,300% annual rate.

KO publishes earnings on Wednesday before the opening bell.

I shall use options that trade for the last time 10 days later, on Aug. 4.

Implied volatility stands at 14%, which is 1.5 times the VIX, a measure of the volatility of the S&P 500 index.

KO’s IV stands in the 41st percentile of its annual range and at the peak of its most recent broad movement.

The price used for analysis was $45.03.

Premium: $0.90 Expire OTM  
KO-iron fly Strike Odds Delta
Long 47.00 95.2% 5
Break-even 92.00
Short 45.00 51.8% 50
Short 45.00 48.1% 50
Break-even 43.90
Long 43.00 91.3% 8

The premium is 45% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I have entered an order on KO as described above. The stock at the time of entry was priced at $45.02.

By Tim Bovee, Fukuoka, Japan, July 25, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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