8/6/2022 Plan:
This week we return to Starbucks (Ticker: SBUX)
8/6/2022 Plan (continued):
- SBUX – Sell the Sept 2 80/75 put spread for 0.52 OR
- SBUX – Sell the Sept 2 80 put for 0.88
- Prices are as of market close 8/5/2022, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
8/6/2022 Commentary:
With our Starbucks shares getting called away at $82 a couple weeks ago and earnings behind the company, I’m looking to get back in at an even lower level – $80. I’ll be selling cash secured puts, but the put spread is fine to minimize the potential loss or to place as a trade if you don’t want shares.
The market is expecting about a $5 move from SBUX between now and expiration and with SBUX at 85.73, that puts this spread a bit out of the expected move, which is nice.
Feel free to Reach out with questions on this or anything else!
8/8/2022 Entry:
Sold SBUX Sept 9 80/75 put spread for 0.52. I also sold 80 puts for 0.88. We will track both but select what is best for your account.
8/15/2022 Update:
The put spreads we sold in SBUX are now worth 0.19, for a current profit of $33/spread sold, a nice return after 1 week. You can close to take the quick win or hold to let them ideally decay further. I’m doing the latter.
The put in SBUX is worth 0.38 at the midpoint for a current profit of $50. I’m holding on to that one through expiration.
8/22/2022 Update:
With a selloff in SBUX late in the week, the put spreads are now worth 0.25 if you didn’t take them off for less earlier in the week (I didn’t). I’ll continue to hold.
The naked puts, if you sold them are worth 0.42 at the mid point. Still profitable.
8/27/2022 Update:
Big selloff on Friday in the market and in SBUX as well. The put spreads are now worth 0.40 with the naked put worth 0.59. There are two weeks left in the trade. If you think the market will continue to sell off, you could close the spreads for a profit and move on to another trade.
9/5/2022 Update:
The SBUX put spreads are worth 0.37 and expire this week. The naked put is worth 0.46 at the mid point if you sold that. Both are profitable and the options expire this week. The lower volatility play is to take them off early in the week. There is almost $3 between the current stock price and the short strike. I’ll be letting at least my naked puts go into Thursday or Friday as I’m happy to take shares. I’ll likely close out of some of my put spreads earlier in the week, time permitting.
9/10/2022 Close:
The SBUX put spreads expired worthless, bringing in $52 per put spread sold in profit. Mmm delicious profit (Editor’s note: profit is not actually edible). If you sold the puts, they also went out worthless for an $82 profit per put sold. Either way, you can buy quite a few coffee beverages with the profit. Please tip your barista.
