3/6/2022 Plan:
This week we look at Starbucks (Ticker: SBUX)
3/6/2022 Plan (continued):
- SBUX- Sell Mar 18 85/80 put spread for 0.55
- JWN – Sell Apr 1 17 put for 0.24
- Prices are as of market close 3/4/2022, 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
3/6/2022 Commentary:
The market is pretty rough right now and very event driven – meaning the invasion of Ukraine by Russia will have more impact on the market than fundamentals at this time. For MANY of our traders with some positions currently down and the markets a bit unpredictable – holding off on trades and closing winners/small losers is a prudent course of action. I am personally putting on some more hedges (VIX products, SPY put spreads, SPY 1x2s) and also selling Far out of the money puts in names I’ll hold ‘forever’. You can also sell call spreads or covered calls in names you own with volatility higher, you can pull in some nice premiums.
Having said that, a couple traditional ideas for this week. The first is returning to SBUX and selling a short term put spread below its recent low of 87.25. The 85 level would be lower than SBUX has traded since late 2020. That doesn’t mean it Can’t get there, of course.
The JWN put assumes we stay above levels last seen in November of 2020. There was a nice pop after earnings and I would add shares below 17 if JWN returns to that level.
Again, keep your position sizes in check, don’t take unnecessary risks, and protect your capital!
Feel free to Reach out with questions on this or anything else!
3/7/2022 Entry:
Sold JWN Apr 1 17 put for 0.24. Held off on SBUX. Trade lightly until the market is more stable. I’m also selling some call spreads in SPY.
3/13/2022 Update:
Our 17 puts in JWN are currently profitable by about $4. I’ll continue to hold with no planned action while we remain about $6 OTM.
3/20/2022 Update:
The JWN puts are down to 0.12 at the midpoint, giving us a current profit of $12 per put sold. With JWN trading close to $27, I intend to hold this to expiration in 2 weeks.
3/26/2022 Update:
The JWN put is only worth 0.06 at the midpoint and expires this week. I’ll hold right to expiration. We’re still about $10 out of the money making this pretty low risk.
4/3/2022 Close:
The JWN put expired worthless, adding $24 of profit for each put sold. A nice trade and nice return for a cash secured put.
