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Mike Khouw’s Coca-Cola Trade

Mike Khouw's Coca-Cola Trade

On CNBC’s “Options Action,” Mike Khouw spoke about Coca-Cola Co (NYSE: KO). He said the stock has not yet reached its pre-pandemic highs and it is providing about a 3% dividend yield, which lands some level of support.

The company is going to report earnings on Wednesday and the stock doesn’t move a great deal on earnings. Khouw sees Coca-Cola as a reasonable value when you put it relative to everything else you can look at. He wants to buy the January $57.50 calls for $2.14 and sell the August $57.50 call for 70 cents. The trade would cost him $1.44. Khouw’s idea is that Coca-Cola is going to move slightly higher, towards $57.50, so that the August $57.50 call expires out of the money. He would then sell another call against his long position.

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Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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