Covered Calls on Starbucks (SBUX)
Starbucks (SBUX) is a good way to round out these covered calls. I recently moved SBUX stock into my “forever hold” category, as it is so totally wrapped up in the American experience of daily life that it will likely be part of both our culture and those of other countries forever.
The $71.15 price of SBUX is best leveraged using the June $72.50 call, which trades at $1.07. That’s a 1.5% return, or 14% annualized, so it’s a nice conservative bet on a great stock I’m happy to own regardless.
Selling two of these brings in $214 and brings our total covered call collection to $1,093.
As of this writing, Lawrence Meyers was long SBUX. He is president of Asymmetrical Media Strategies, a crisis PR firm, and 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.