Stock Option Trading News

NASCAR Delivers KO and Daytona Looses its PEP

The International Speedway Corporation (ISCA) stated Monday it would end its relationship with Pepsi Cola (PEP) and enter into a 10-year deal with Atlanta-based Coca-Cola (KO). This will make Coke the official soft drink for 11 of the company’s race tracks including where the Daytona 500 is run. Pepsi has been the official beverage at Daytona 500 for 49 years. This comes somewhat cruelly, although perhaps poignantly to some, one day after the running of the Pepsi 400.

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The speedways owned by ISCA include The Daytona 500 Experience, Chicagoland Speedway, Homestead-Miami Speedway, Kansas Speedway, Michigan International Speedway and Richmond International Raceway. News reports stated the relationship would extend to Darlington Raceway in 2009, Talladega Superspeedway and Watkins Glen International in 2011 and Phoenix International Raceway in 2012.

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Sandy Douglas, president of Coca-Cola North America stated in a press release, “While Coca-Cola has enjoyed a storied history in auto racing, today marks a exceptional milestone as Coca-Cola, the world’s number-one sparkling beverage, will soon be served at Daytona International Speedway, home of ‘The Great American Race,’ as well as some of the finest facilities in all of motorsports. Together with our bottling partners at Coca-Cola Enterprises, we look forward to refreshing race fans at ISC properties with the greatest beverages in the world, and creating best-in-class marketing programs with ISC that bring fans even closer to the sport they love.”

“This new relationship ranks among the most significant marketing partnerships in ISC history,” said ISC President Lesa France Kennedy. “It also further demonstrates the significant value of our asset base including premier facilities, events, intellectual property and operational support services. We welcome Coca-Cola to the ISC family and we look forward to a long and successful relationship.”

ISC spokesman Lenny Santiago said, “Pepsi’s decision was to focus on other parts of its sports business, so we both decided to part ways.”

Pepsi’s spokeswoman Nicole Bradley made the magnanimous public statement, “We have enjoyed a wonderful 50-year partnership with Daytona, and we wish them the best in the future.” It is presumed, the Pepsi 400 will end on this, its 49th annual, year.

Looking at this News from an Options Trading Perspective:
Will this news mean a higher than average profit for either Coke or the ISC? The news alone may not cause a movement but when combined with other research, you may find this news helpful in indicating what directions the stocks will move. However the real thunder in our daily articles is when we show off the power of the PowerOptions search engine to take a stock symbol, an investor’s suspicion about the movement of the stock, and within seconds produce a list of attractive trades. And an investor can analyze trades with over 50 screening criteria!

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Potential Trades:
All of the following option trades have 74 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.

Covered Call Search
Symbol Stock
Intl. Speedway Corp. ISCA 49.77 QWYIJ 07 SEP 50.0 (74) 1.7 3.4 3.5 4
PepsiCo Inc. PEP 65.8 PEPJM 07 OCT 65.0 (102) 2.95 4.5 3.4 3.4
Coca-Cola Co. KO 52.03 KOKX 07 NOV 52.5 (130) 2 3.8 4 4.9
Coca-Cola Co. KO 52.03 KOKJ 07 NOV 50.0 (130) 3.5 6.7 3 3
(For more details click the ticker symbol above)

The trades listed above cover the ISCA, Coca Cola and Pepsi stocks over a three month period from September to November. These trades offer a 3 to 4.9% potential profit and 3.4 to 6.7% downside protection.

Competitors for ISCA include: Dover Motorsports Inc. (DVD), Speedway Motorsports Inc. (TRK), and Indianapolis Motor Speedway Corporation (private).
Competitors for PEP include: Cadbury Schweppes plc (CSG), Coca-Cola Co. (KO), Kraft Foods Inc. (KFT), and Coca-Cola Enterprises Inc. (CCE).
Competitors for KO include: Cadbury Schweppes plc (CSG), Pepsico, Inc. (PEP), Cott Corp. (COT), Groupe Danone ADS (DA), and National Beverage Corp. (FIZ).
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[tags] The Daytona 500 Experience, Chicagoland Speedway, Homestead-Miami Speedway, Kansas Speedway, Michigan International Speedway, Richmond International Raceway, Darlington Raceway, Talladega Superspeedway, Watkins Glen International, Phoenix International Raceway, Lesa France Kennedy, Indianapolis Motor Speedway Corporation, CCE, Coca-Cola Enterprises Inc., COT, Cott Corp., ISCA, Intl. Speedway Corp., KFT, Kraft Foods Inc., KO, Coca-Cola Co., PEP, PepsiCo Inc., covered call investment strategy, investment strategy, iron condor, options trading, poweroptions, stock option trading, stock options [/tags]

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