The Coca-Cola Company (KO) is an Atlanta based manufacturer and international distributor of soft-drinks and non-alcoholic beverages. At the time of this post (1:55PM CST), KO is currently trading at 42.14, up 0.98% on the day. The stock is currently trading in the upper half of its 52 week trading range of 36.89-45.00, and has seen an increase in share prices today after an earlier announcement that the company would be raising its quarterly dividend payment to shareholders by 8% for the coming disbursement.
Earlier this morning at approximately 9:02AM CST, OptionHacker detected and flagged some hugely bullish options activity in KO that preceded the stock’s notable move higher on the session. A trader came in and bought 20,931 of the KO May ’15 44.0 strike calls at the ask price of 0.33. In conjunction with an examination of the open interest in the strike which shows just 10k contracts heading into today’s trading, we can confidently surmise that this was an opening bullish transaction looking for continued upside in KO in the coming months. With an initial cash outlay of approximately $690,723 before commission costs, this large call position was almost immediately profitable for this trader as KO has climbed steadily throughout the day, and the options reflecting a current bid ask spread of 0.54 x 0.55. We will continue to monitor this position in KO for continued upside heading into the May monthly options expiration approximately 85 trading days away.
Trade: A trader bought 20,931 KO May 44 Calls for $0.33
Risk: $33 per 1 lot
Reward: Unlimited
Breakeven: $44.33
These calls have already traded as high as $0.56 on the trading day making this an extremely profitable trade. More blocks of these hit the tape today as well with over 50,000 contracts now trading on that line.
Regards,
Andrew Keene
President/Founder KeeneOnTheMarket.com
