Coconut Reef is the fringing reef off the southern end of Nelly Bay, the island's main arrival point, and the North Queensland Underwater Explorers Club describes it as a narrow strip of reef about 100 m offshore, running parallel to the beach. It is easy to reach – a short walk from the ferry terminal and a beach entry at the old boat ramp – and in 2012 a snorkel and dive trail with translocated giant clams and marker floats was installed here, with a second trail nearby. The reef is broken into patches by sand gullies, with large colonies of lettuce coral, big coral bommies and massive Porites heads at 7–8 m.

Small reef fish are plentiful, and a slow diver will find nudibranchs, wart slugs, scorpionfish and cleaner shrimps. At night turtles and painted crayfish come out, and the site has a following as a relaxed night dive close to accommodation. Nelly Bay faces south-east, so it takes the trade winds more than the Arcadia bays, and visibility is often limited.

The club notes that seasonal sargassum blooms in the hotter months crowd out the lettuce coral, so the reef looks best in the cooler months when the macro-algae die off. Navigation is the other challenge – the reef is a low strip with similar-looking gullies, so a compass box pattern is recommended. The club also warns of green ants in the trees above the beach, which drop on unwary divers gearing up in the shade.

A former white mooring buoy marked the reef for boats, but the yellow snorkel-trail floats are no-mooring markers; anchor on sand if you must. Coconut Reef is not spectacular, but it is a convenient shallow reef for snorkellers, training and night dives.

Magnetic Island is reached by SeaLink passenger ferry from the Breakwater terminal in Townsville to Nelly Bay (about 20 minutes, frequent daily services) or by the vehicle ferry from Ross Street, South Townsville (about 40 minutes). Buses, hire cars and 'topless' mokes run from the Nelly Bay terminal to Arcadia, Horseshoe Bay and Picnic Bay. The site is a short walk or bus ride from the Nelly Bay ferry terminal.

Park along Nelly Bay Road near the southern end of the beach (shade trees above the sand) and enter at the old boat ramp. The reef lies about 100 m offshore; the snorkel trail with its floats starts from the beach in front of the resort area and a second trail runs near the southern end. Gear carry is under 30 m.

Magnetic Island's bays are sheltered from different winds depending on which side they face. The dominant south-east trade winds (15–25 knots, April–September) chop up exposed eastern and southern bays and stir up silt, so the island's best diving comes in the calmer months of August–December and on mornings before the sea breeze. Visibility is usually 3–8 m and occasionally 10–15 m; it drops sharply after strong winds, big spring tides and wet-season rain (January–April) when Ross River and Burdekin run-off discolour the water.

Dive at slack water, ideally high tide. Sargassum seaweed blooms in the hotter months can smother shallow reef flats. Marine stinger season (box jellyfish and Irukandji) runs roughly November to May – wear a full-length stinger suit or wetsuit with hood and gloves, carry vinegar.

Stinger nets are installed at Alma Bay, Picnic Bay and Horseshoe Bay in season. Nelly Bay faces south-east and is exposed to the trades; dive on a calm day or light northerly at high tide.

NQUEC recommends swimming a box pattern on repeated 90° compass bearings to keep track of position. Snorkel out ~100 m, descend at the reef edge, explore the lettuce-coral patches and bommies at 5–8 m, then return shoreward.

No regular guided dives; Pleasure Divers (Arcadia) hires gear and can guide on request. Nearest dive centres for gear hire, fills and local advice: Pleasure Divers Magnetic Island, Adrenalin Snorkel & Dive.