Stock / Symbol: [private_monthly]Coca-Cola Company / KO [/private_monthly]
Price at trade post: $68.45
Option Strategy: double calendar call spread
Reasoning: Fundamentally, [private_monthly]KO [/private_monthly] is worth about $65 a share and is technically range bound between 66 - 71. As a steady company in a tight trading range, [private_monthly]KO [/private_monthly]is another ideal calendar spread candidate. We're looking to close this trade next Friday for around a 9% yield, so we're selling the weekly options.
Max Risk: $670
Max Reward: $65 or 9.70% @ $67.5 - $70 by Nov 11th
Profit Range: $67.10 - $70.40 by Nov 11th
Suggested Downside Stop @: $63.30
Suggested Upside Stop @: $70.50
Trade Details:
[private_monthly]
BTO 2 KO Feb12 67.5 Calls
BTO 2 KO Feb12 70 Calls
STO 2 KO NovWk2 67.5 Calls
STO 2 KO NovWk2 70 Calls
for a net debit of $3.35 per contract (GTC, limit order)
Requirements:
Cost/Proceeds $670.00
Option Requirement $0
Total Requirements $670.00
Estimated Commission $12.95
[/private_monthly]
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