$117 profit in KO

Happy weekend!

While most trades go smoothly, not all of them do.

Today's post is a longer exploration of one trade in KO that needed a few months to turn a profit, and the steps that were taken to make that possible.

This week:

$117 profit in Coca Cola (KO)

Going into 2025, this KO trade was one of two open trades that I was carrying over from 2024.

Obviously they weren't closed for a profit which means they were initially losing positions that needed some help.

I initially sold a cash-secured put in KO at the $65 strike expiring on Dec 20, receiving $78 in premium.

Unfortunately, as you can see from the chart below, KO spent all of December and January below $65, which means I would be forced to buy 100 shares of KO at $65 per share if I didn't manage my position.

Coca-Cola stock chart over 6 months, ending at $70.80. Red downward trend, -0.98% change. Dates from Oct 2024 to Feb 2025 shown.

In this case, the best course of action was to roll my position out in time.

Rolling is a great way to rescue a position and give it more time to work out.

This involves closing the previous position and opening a new position for a credit (ie getting paid to get it done).

When I first heard about rolling, I couldn't believe it existed. A way to save my trade that's gone wrong and get paid while waiting? Sign me up!

I rolled the position twice, with the last trade being rolled to the Feb 21 expiry, and I collected an additional $59 over these 2 trades, bringing the total premium collected to $137.

Trade update post titled "KO - heads up on closing order." KO up 3%. Closing planned at market open. Mentions 10 DTE and extrinsic value. Admin: themoneyloaf.

Eventually, the deciding moment came down to KO's recent earnings announcement, and thankfully, the market liked what they had to say which sent the stock rallying.

Unlike my usual process, because I knew they were announcing earnings, I didn't set a closing order so that I could better gauge what the closing price should be.

When I saw that KO was up 3% before the market opened, I was prepared for the option's value to shrink pretty dramatically.

Text with a bread emoji and admin label. Title: "KO closing trade." Subtext discusses BTC for approximately $0.20.

To close the position, I paid $20, locking in a realized profit of $117, or 85% of max profit (117 divided by 137).

Another point worth noting from the first screenshot is that even with the rally to $70, KO is actually still down about 1% over the last 6 months.

This means that if I had just bought KO at market prices 6 months ago, I would be sitting on a loss.

Instead, thanks to selling options and rolling the position, I'm out with a profit and can redeploy my capital to other areas.

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Closing thoughts & useful links

The market can't seem to make up its mind about NVDA's earnings, but the volatility provided the opportunity to open some new positions this week.

Hoping for more chances in the weeks ahead!

Have a good weekend!

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This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.