Starbucks (SBUX): Naked Puts
The last naked put of the trio is Starbucks (SBUX).
SBUX is almost the perfect stock to sell naked puts or covered calls against. It is a world-class brand that continues to grow and evolve, it has a stellar balance sheet, it sells multiple lines of products across many different distribution points, and is likely to survive the zombie apocalypse. I’d be happy to own the stock for the very long term.
SBUX stock trades at $73.07. The April $72.50 Puts are going for $1.70. I’ll sell two of them for $340.
The total premium collected is thus $340 + $420 + $340, or $1,100. Sure, that’s not a grand on the nose — but who’ll complain about a little extra?
As of this writing, Lawrence Meyers was long ECPG and SBUX. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at firstname.lastname@example.org and follow his tweets at @ichabodscranium.