I prefer to drink Coke, but think Pepsi might be a better investment. Everyone knows about Pepsi so I'm not going to say much about it. Here is the buy-write:
Buy 100 PEP @ 63.94: ($6,394)
Sell 1 Jan 13 62.5 call @ 6.54 654
Sell 1 Jan 13 65 put @ 8.00 800
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Total outlay: ($4,944)
Potential return: $1,158 plus any dividends collected over the next 18+months. After dividends, the return is around 30% on a stock that doesn't have to go up at all from todays price.
Break-even on the trade is 57.22 or about 10% below current prices.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
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