Options players have taken the bearish road less traveled today, with intraday put volume on The Coca-Cola Company (KO: sentiment, chart, options) nearly six times the norm. More specifically, heading into the close, the soda sultan has seen more than 8,000 puts cross the tape, compared to its average daily volume of fewer than 1,500 contracts.
More than half of that volume has centered on the stock's August 42.50 put, which has seen roughly 4,300 contracts change hands so far today. At 11:07 a.m. Eastern, two blocks totaling 3,000 contracts crossed the tape at the ask price of $0.90, suggesting that the bulk of today's activity should translate into fresh positions tomorrow. The out-of-the-money 42.50 strike is already home to peak put open interest in the August series of options, with nearly 8,100 contracts in residence.
Meanwhile, the 42.50 strike is also most popular in the newly front-month series of options, home to more than 6,100 open put positions. In afternoon activity, the June 42.50 put has seen about 1,250 contracts change hands, while the less popular June 45 put has experienced volume of almost 1,500 contracts.
Today's preference for puts stands in stark contrast to the sentiment among near-term options players. Following the expiration of May-dated options last week, the security's Schaeffer's put/call open interest ratio (SOIR) fell to 0.48, implying that calls more than double their bearish brethren among options slated to expire within three months. What's more, compared to similar readings taken during the past 52 weeks, KO's SOIR stands at an annual optimistic peak. In other words, short-term speculators haven't been more bullishly biased toward the blue chip at any other time during the past year.
Speaking of bulls, options bettors aren't the only group with high hopes for KO. According to Zacks, eight out of 12 ranking analysts deem the stock worthy of a "buy" or better rating. Plus, Thomson Reuters pegs the consensus 12-month price target on the equity at $51.85 – in a neighborhood KO hasn't explored in more than six months.
Technically speaking, the shares of KO have fallen behind the pack in recent months, underperforming the S&P 500 Index (SPX) by 11% during the past 60 trading sessions. What's more, despite perforating resistance at its 32-week moving average last week, the stock could face additional challenges in the near term. Most notably, the security could face a roadblock in the 47 region, which has capped KO's rally attempts since October 2008. Furthermore, the 47 area is home to the equity's descending 50-week trendline, which could act as an additional barrier on the charts.
Should the shares of KO get smacked lower by resistance, the skeptics could get spooked. A reversal in sentiment in the options pits, or a round of downgrades and/or price-target cuts, could place additional selling pressure on the Dow-listed diva.
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