I’m back with more put writing candidates. None of these are actual trades yet.
music selection: “It Don’t Come Easy” — Ringo Starr
First up is Coca-Cola (KO). You have probably heard of them. This company has arguably the world’s most valuable brand. The company is the leader in the beverage space, offering 3,500 products. They operate in 200 countries and employ 146,000 worldwide. The company has very strong cash flows and has rewarded shareholders with decades of dividend increases.
A near the money put, KO160429P00046500, is selling for 1.85 a contract. The annualized yield on that is 46.84% over 31 days. The trade enjoys 3.9% downside protection. That is as tasty as the company’s namesake beverage.
Next up is Eli Lilly & Co (LLY). Eli is the tenth largest pharmaceutical company in the world and dates back to shortly after the Civil War. It is best known for the discovery of insulin. The company has a long history of paying an uninterrupted dividend, since 1885! It is a big slow mover that is well suited to put writing for income.
A near the money put, LLY160429P00072000, is selling for 2.60 a contract. The annualized yield is thus 42.52% over 31 days. The trade enjoys 3.4% downside protection.
Finally, I wrap things up for today with McDonald’s (MCD). The golden arches is the world’s largest fast food retailer. It owns more than 33,000 restaurants in 119 countries and serves over 68 million customers a day. By comparison, Wendy’s has only 6,500 franchises. MCD absolutely dominates its market. The company enjoys double digit margins, strong cash flow, and has a long history of paying a dividend.
A recent near the money put, MCD160429P00125000, is fetching 3.20 a contract. That is a 30.14% annualized yield over 31 days on the market leader. The trade enjoys 3.1% downside protection.
My Disney call expires Friday. I’ll be back next with March Transparency.
Devour your prey raptors!