Option Strategy | Coca-Cola's Defensive Profile and Bullish Options Sentiment Favor Bull Put Spread Setup

• Coca-Cola is expected to release earnings before the market opens on Oct 21. The consensus forecast for Q3 is ~$0.78 EPS on ~$12.4 B revenue, implying modest year-on-year growth.

• With bullish call interest and favorable implied volatility, traders see limited downside risk. A bull put spread strategy offers investors premium income while limiting downside risk.

Coke’s Broad Portfolio and Emerging-Market Exposure Underpin Its Valuation

Coca-Cola announced tech entrepreneur Max Levchin (PayPal co-founder and Affirm CEO) was elected to its board on Oct. 16, 2025. Simultaneously, the company declared a $0.51 quarterly dividend (3.0% yield) payable Dec. 15, underscoring its long history of shareholder returns.

In early October 2025, Coke unveiled plans to introduce 7.5‑oz “mini” cans (priced ~$1.29) and a cane-sugar–sweetened Coca-Cola in the U.S. market. These new offerings aim to appeal to price- and calorie-conscious consumers amid sluggish soda demand.

As the world’s largest beverage company, Coca-Cola competes fiercely with PepsiCo (PEP) and other global brands. Coke’s broad portfolio (Coke, Diet Coke, Sprite, Fanta, Dasani, etc.) and huge emerging-market exposure (e.g. India’s Thums Up) underpin its premium valuation. In comparison, PepsiCo’s footprint is more North America–centric. However, investors watch Pepsi’s moves (e.g. recent CFO comments on consumer trends) for signs of changing beverage preferences.

KO’s low market beta (~0.4) and defensive business mix have helped it hold up in recent market pullbacks. If the economy stabilizes or growth accelerates, Coca-Cola could benefit from pent-up demand – in line with views that a Dividend King like KO would “do even better if economic growth takes off”.

Coca-Cola’s OI Shows Bullish Bets

Open interest for KO expiring this week showed bullish sentiment as Call open interest totaled at 20,563, while Puts stood at 8,927. Put-Call open interest ratio reached 0.43.

Source: OptionCharts

The highest open interest expiring this week was seen on $70 strike Call, with 4,005 unclosed contracts as of September. The $72 strike call option also showed heavy bets with 3,562 unclosed contracts.

Source: OptionCharts

Option Strategy: Bull Put Spread

The expected move for KO options expiring on Oct 24, 2025 (4 days) (w) is ±$1.69 (2.47%), with a price range of $66.74 - $70.12.

KO closed around $68.4 last Friday. The stock is modestly positive over the past month and roughly +8% year-to-date, amid a defensive, dividend-focused profile.

Source: OptionCharts

A put spread involves buying a put option with a lower strike price (Put A) and simultaneously selling a put option with a higher strike price (Put B) on the same underlying asset and expiration date.

The Bull Put Spread’s main trading position and primary profit driver stem from the “Sell Put B” leg. This strategy functions as a lower-risk version of a short put, embodying the characteristics of an option seller.

It aims to generate premium income while limiting downside risk, typically used when anticipating a modestly bullish or neutral market. The strategy is most effective during periods of high implied volatility, allowing profit potential even when the underlying price remains flat, range-bound, or moderately volatile.

Example: Sell $67 Put / Buy $65 Put ( Oct 24, 2025 expiration)

$KO Vertical 251024 65.0P/67.0P$

• Max Profit: $31 (est.)

• Max Loss: -$1,69 (est.)

• Breakeven: $66.69

• Estimated Margin: $200

Source:Tiger Trade App