Today shares of Coca-Cola are over 5% higher after the company reported better than expected earnings per share and revenue, plus a 4% increase in sales volume. Additionally Coca-Cola announced that that they had agreed to create a franchise bottling system with five bottling companies. The stock has seen heavy option trading as a result of its big pop, with the biggest trade of the day being the sale of 5000 August 44 calls for $0.58.

By selling this call, the trader believes that the stock will not be above 44.58 come August expiration, and if it is there he is willing to either get short the stock or take profit on his longs. If this was done against stock, it would create a covered call position for the trader. This is a way to play the seasonal “sell in May and go away” trade without actually going away. Instead of selling stock positions outright, you can sell call options against those stocks to create a downside cushion that will help your portfolio outperform if we see the typical season summer weakness reemerge.

If there is a summer sell-off, then defensive consumer stocks like Coca-Cola will likely hold up relatively well. If this stock is at or above 44 at August expiration this trader will have to sell his stock there and book his profits. This would then make a for a clean transition into a higher beta name to play a fall rally.