KO bull put spread: credit, risk, strikes

$87.59Coca-Cola Company · chain snapshot captured Aug 1, 2026

Low realized vol, a reliable quarterly dividend, and IV that usually sits in the mid-to-high teens. Premium sellers get paid little per contract here — the trade is about total return on a share position you were going to hold anyway.

A bull put spread sells the $85 put and buys the $83 put for protection, both expiring Aug 28. On KO at $87.59 that pays $47 up front against $153 of defined risk, with 73% probability of keeping the credit. It is the cash-secured put's capital-efficient cousin.

The trade, priced from the chain

27d to August 28, 2026

Leg	Qty	Price	Δ	IV	Cash
SellAug 28 $85 put	1	$0.94	-0.28	21%	+$94
BuyAug 28 $83 put	1	$0.47	-0.17	21%	−$47

Net credit

$47

Max profit

$47

Max loss

$153

Chance of profit

73%

Breakeven

$84.53

−3.5%

$80.55 – $90.04 price rangespot $87.59breakeven $84.53P/L at expiration

Open this bull put spread in the builderLoads these exact legs and re-quotes them live. No account needed.

Every leg above is priced at the chain’s own quote — the identical number the builder will show you when you click through (last traded price), captured August 1, 2026 with a 15-minute delay. Only strikes whose print survives an implied-volatility check (within 20% of its own IV) and a no-arbitrage check across the ladder are priced here. Full methodology. Greeks, breakevens, max profit/loss and probability of profit are computed by OptionTracker’s engine at r = 4.2%. Educational analysis, not investment advice.

Yield on the capital this actually ties up

Credit / contract

$47

Buying power

$153

Return · 27d

30.7%

415% annualized

Return on risk

30.7%

credit ÷ max loss

Annualized figures assume the same trade repeats every 27 days at the same premium. Nothing does. Use them to compare strikes and tickers, not to forecast a year.

How a bull put spread works

You are still selling downside — just not all of it. The long $83 put cuts the tail off below that level, which is why this needs $153 of buying power instead of the $8,500 a cash-secured put would tie up.

Above $85 at August 28, 2026, both puts expire worthless and you keep the full $47. Below $83, you lose the maximum $153. Breakeven is $84.53.

Return on risk is 31% for 27 days — 415% annualized. That headline is the reason people prefer spreads to cash-secured puts, and the reason spreads blow up accounts: the same capital supports several times the notional risk.

When it makes sense

IV is rich — at 21% ATM, KO is the 18th richest of the 20 underlyings on this site — and you want to be short vega.
You want a hard floor. The long wing turns an open-ended obligation into a known $153.
You do NOT want the shares. If you'd rather own KO at $85, the cash-secured put is the better instrument — assignment there is the plan, not the accident.
You can name the price at which you would be happy to be wrong, and it is inside the structure rather than outside it.

Where the risk actually is

The risk is leverage, not the structure. $153 per spread is small; the temptation to sell ten of them because the buying power allows it is how a 73%-win-rate trade produces a losing year.

Early assignment on the short leg leaves you long 100 shares plus a long put — a synthetic call, not a disaster, but a position you did not choose and one that requires $8,500 of cash on Monday.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

What is different about doing this on KO

Nobody buys Coca-Cola for the option premium, and that is the correct way to think about writing calls on it. The credits are small in absolute dollars and small as a percentage of spot; what they do is add a point or two to the total return of a position held for the dividend and the stability. Judge the overlay against the dividend it might cost you, not against the yields on a high-volatility name.

KO's Aug 28 strikes are $1 apart near the money (1.14% of spot). Enough rungs to express a view, few enough that each one moves the economics visibly. 5.5k contracts of open interest on Aug 28 is thin, and a structure that needs four separate fills will pay for it. 21 strikes on that expiry — 40% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Reasonable at the near strikes; the wings are quiet enough that a four-leg structure is not worth the slippage.

The surface is close to flat: only 0.5% between the 25-delta put and the 25-delta call. A flat skew means the usual put-side pickup is not there, so the case for selling downside rather than upside on this name is weaker than the habit suggests. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.

At 21% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $5.08 over 27 days — roughly −5.8% to +5.8%, or $82.51 to $92.67. A short-premium structure here is a bet that 5.8% over 27 days is more than KO will actually use. That is the thesis, stated honestly.

What actually goes wrong here, as opposed to in general: Chasing yield by moving the short call closer to the money on a name whose whole appeal is that you keep the shares.

Picking the strike on KO

Place the short strike on delta, then choose the width you can afford to lose. On KO at $87.59:

Band	What it means	When it fits
0.10 – 0.16 Δ short	Well below the market	High probability, thin credit. Needs strict sizing; the tail still exists.On KO: the Aug 28 $82 put at $0.35, 5% annualized
0.20 – 0.30 Δ short	The standard credit-spread band	Credit ≈ 1/3 of width is the usual quality bar. Most spreads live here.On KO: the Aug 28 $84 put at $0.71, 11% annualized
0.35 – 0.45 Δ short	Close to the money	Rich credit, frequent management. You are taking a real directional view.On KO: the Aug 28 $87 put at $1.72, 27% annualized
Width	Sets max loss per spread	Narrower = smaller risk per unit, worse credit/width ratio after fees.

The live Aug 28 put chain below carries the deltas. Credit divided by width is the number to compare across strikes — anything under 25% is usually not worth the tail you're renting out.

From the far strike to the near one, the premium below moves by a factor of 11.3. Where you sit on that curve is the trade. Open interest concentrates at $82 on this expiry, which is usually where the fills are cleanest.

KO 2026-08-28 puts around the money: strike, distance from spot, mid price, delta, implied volatility and open interest.
Strike	vs spot	Mid	Δ	IV	% of spot	Ann.	OI
$81	−7.5%	$0.24	-0.09	22%	0.3%	4%	141
$82	−6.4%	$0.35	-0.12	22%	0.4%	5%	214
$83	−5.2%	$0.47	-0.17	21%	0.5%	7%	71
$84	−4.1%	$0.71	-0.22	22%	0.8%	11%	156
$85used	−3.0%	$0.94	-0.28	21%	1.1%	15%	107
$86	−1.8%	$1.20	-0.36	22%	1.4%	19%	117
$87	−0.7%	$1.72	-0.43	20%	2.0%	27%	137
$88	+0.5%	$1.96	-0.51	20%	2.2%	30%	92
$89	+1.6%	$2.70	-0.60	20%	3.1%	42%	26

KO puts expiring August 28, 2026· 15-min delayed capture · “Ann.” annualizes the mid as a percentage of spot over 27 days.

Managing the position

Close at 50% of max profit, same as any short-premium trade.
Set a stop at roughly 2× the credit. Credit spreads that go against you tend to keep going.
Duration beats delta for controlling risk. Selling a 45-day option and closing it at 21 days puts you in the flattest part of the gamma curve; selling a 7-day option at the same delta puts you in the steepest.
Count assignment as an outcome, not an accident. If the plan does not survive being assigned on the worst day of the period, the size is wrong.

Common mistakes

Treating it as a cash-secured put

A CSP that goes wrong leaves you owning KO at a basis you chose. A put spread that goes wrong leaves you with $153 gone and no shares. Different trades, different plans.

Selling spreads in low IV

Credit spreads are short vega. Selling them when KO's 21% IV is at the low end of its range means you collect little and own the risk of vol expanding.

Selling premium because the credit is large

Credits are large when the market thinks the move might be. Rich premium is a forecast, not a discount, and the two are only distinguishable after the fact.

KO bull put spread FAQ

How much buying power does this KO put spread need?

About $153 per spread — the width minus the credit. Compare that with $8,500 for the equivalent cash-secured put.

What is the breakeven?

$84.53 — the short strike less the credit received. KO finishing anywhere above that at August 28, 2026 is a profit, with the full $47 kept above $85.

How much is KO expected to move by Aug 28?

The Aug 28 options imply a one-standard-deviation move of $5.08 — about 5.8% of the KO share price — over the 27 days to expiry. That is the market's estimate, not a forecast: roughly a third of the time the actual move is larger.

Is KO option skew favouring puts or calls?

Neither, materially. The 25-delta put and call are within 0.5% of each other on the Aug 28 chain, which is an unusually flat surface for a US equity.

Build it yourself

Everything above is one construction at one moment. Open it in the builder to drag strikes along the ladder, scrub the expiry, and watch max profit, breakevens and probability of profit recompute live against the real KO chain — free, no account.

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