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Option Trading#1 CSP on Coca-cola Stock

 #Monthly Income on Option Trading

21 July 2025 - Selling Put option on KO stock (CSP) 

Option Trading Strategy: Selling a Cash Secured PUT Option (Coca-Cola Stock, KO)

Basic Trade Details

  • Underlying Stock: KO (The Coca-Cola Company)

  • Current Stock Price (assumed): 68.95

  • Option Type: Cash Secure Put Option

  • Strike Price: $68

  • Expiration Date: August 25, 2025

  • Premium Received (Commission): $60 per contract (i.e., $0.60 per share since 1 option = 100 shares)

Scenario 1: Stock Price Remains Above $68 by Expiry

If KO stays Above $68:

  • The option expires worthless.

  • You keep the $60 premium as profit.

  • Outcome: $60 income, no shares purchased — ideal outcome for a covered put seller.

Scenario 2: Stock Price Rises Below $68

If KO rises Below $68:

  • The option is exercised.

  • Your shares are purchase at $68 per share.

  • You still keep the $60 premium.

  • Net cost price = $6800 -60 = $6740 

  • Outcome: Cost per share drop to $67.40 (Lower than S$ 68)


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KO Stock Valuation:

  • Current P/E ≈ 28× earnings, with TTM P/S ≈ 6.4× MarketBeatSimply Wall St.

  • A discounted cash flow (DCF) fair value estimate places KO at $94.40, ~35% above today’s price

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