Call Spread on CCE on 9/19/2012

Coca-Cola Enterprises (CCE) produces, distributes, and markets nonalcoholic beverages. It provides still and sparkling waters, juices, sports drinks, juice drinks, coffee-based beverages, and teas. Coca-Cola Enterprises, Inc. offers its products primarily under Coca-Cola, Diet Coke/Coke Light, Fanta, Coca-Cola Zero, Capri-Sun, Schweppes, Sprite, Chaudfontaine, Minute Maid, Oasis, and Dr. Pepper brands.

The company distributes its products through retailers and wholesalers; and through licensed territory agreements in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden.

Shares have formed a bullish "flag" following the company's earnings report. Note that in that report the company said that it plans to return at least $5.5B to investors by year-end. The firm has 294.5 million shares in float. The $5.5B cash translates to a one time dividend of about $17.

Here is the trade:

Buy 1 November $30 Call Option (CCE121117C00030000) for $1.70

Sell 1 Jan'13 $35 Call Option (CCE130119C00035000) for 35c

Last Stock Trade:  $31.24

Net Investment: $1.35

Maximum Loss: $1.35, if stock drops below $30

Maximum Gain: $3.76

If you are a risk taker, then do NOT sell the Jan'13  $35 call options, then your possible return could be +$17 if the dividend of $17 is announced!! Your maximum loss would then be $1.70

Trade Buy 1 November $30.00 Call at $1.70 Sell 1 January $35.00 Call at $0.35 For a net debit of $1.35 Profit/Loss Analysis Breakeven at $31.35 Maximum profit is $365.00 at strike of $35.00 Maximum loss is ($135.00) at strike of $30.00 Closing Summary Sold 1 November $30.00 Call at $0.00 Bought 1 January $35.00 Call at $0.00

Position closed on 12/18/2012 at price of $0.00 with a -100.00% loss in 90 days.

Updates

12/18/2012 1:23:51 PM

We have closed this trade. The firm announced a share buy back rather issuing a one time dividend.

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