Investors in Coca-Cola Co (KO) saw new options begin trading today, with significant interest focused on the May 1st expiration. A put contract at a $77.00 strike price has a current bid of $1.68, allowing investors to set their effective purchase price at $75.32 per share, reflecting an approximate 1% discount to the current share price of $77.59. Analytical data indicates a 56% likelihood that this put contract may expire worthless, potentially yielding a 2.18% return on cash commitment, or 15.93% annualized.
On the calls side, a call contract at the $78.00 strike price has a bid of $1.59. If shares are purchased at $77.59 and the call is sold as a “covered call,” the total return could be 2.58% by May 1st, excluding dividends. This contract also faces a 51% chance of expiring worthless, potentially resulting in a 2.05% additional return, or 14.96% annualized.
The implied volatilities for the put and call contracts stand at 20% and 18%, respectively, while the actual trailing twelve-month volatility is calculated at 17%.
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