Stock / Symbol: [private_monthly]Coca-Cola Company / KO [/private_monthly]
Price at trade post: $66.86
Option Strategy: butterfly 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]remains an ideal butterfly & calendar spread candidate. We expect that the stock will trade at or near $67.50 between now and next Friday. At such time, we will attempt to close the trade for around a 20% yield.
Max Risk: $252
Max Reward: $145 or 57.5% @ $67.5 by Dec 16th
Profit Range: $66.30 - $68.60 by Nov 18th
Suggested Downside Stop @: $66
Suggested Upside Stop @: $68.40
Trade Details:
[private_monthly]
BTO 2 KO Dec11 65 Calls
STO -4 KO Dec11 67.5 Calls
BTO 2 KO Dec11 70 Calls
for a net debit of $1.26 per contract (day order, limit order)
Requirements:
Cost/Proceeds $254.00
Option Requirement $0
Total Requirements $254.00
Estimated Commission $12.95
[/private_monthly]
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