Coca-Cola Company KO Daily - Lagging the SPY with low volatility Long

Coca-Cola Company (The)NYSE

Description

⋅ Jun 17, 2014 3:47 PM

There is a big divide here between the performance of the overall market and the performance of KO, Coca-Cola.

The way to set up this trade is to go long KO and sell short an equivalent $-amount of SPY shares.

Over time, I think that KO will start to outperform the market and this trade will make a profit. If they both go up, we need KO to do better than the market. If they both go down, again, we want to see KO do better and decline less than the market. The profit is in the difference between the performance and not the outright performance of KO.

Tim KO 40.96+0.30 (+0.74%) SPY 194.46+0.16 (+0.08%)

pairs PAIR

Comments

A-shot

⋅ Jun 17, 2014 3:48 PM

Wow that's a smart move!

timwest

⋅ Jun 18, 2014 3:08 PM

It will only look smart if it makes money :-) But it is a strategy I am comfortable with.

timwest

⋅ Jun 26, 2014 4:08 PM

Nice profit so far. A couple of % gain in a short period without any loss along the way. So far, so good.

A-shot

⋅ Jun 26, 2014 4:59 PM

But do you pay brokerage fees? Or do you trade large amounts?

timwest

⋅ Jun 20, 2014 1:58 PM

KO grinding higher and beating the SPY over the past two days. KO +2.0%, SPY only up 0.7%. 1.3% profit in 2 days.

timwest

⋅ Jun 18, 2014 3:07 PM

That is a long link - what is in the link? Let me know before I click on it. Thanks.