We’ve been generating income by selling options against Starbucks (NASDAQ:SBUX) for years, and we aren’t about to stop now.
We’re totally addicted, and the uptrend is too tasty.
Last week, SBUX completed a bullish flag continuation pattern by breaking above the down-trending resistance level that served as the top of the consolidation range the stock entered in mid-April.
SBUX is now pulling back a bit to retest support after the initial breakout.
To take advantage of this set-up, we recommend selling to open a new put write on the stock.
We chose the $110 strike price because it lines up with the most recent support level established by the stock.
The market is still quite volatile, and we want to make sure to give SBUX a little wiggle room to move without dropping below our strike price.
We also chose an early July expiration date, which gives this trade nearly a full month to play out.
We expect the company to do well during this period of economic expansion in the United States and abroad, but we also want to be prepared for any profit-taking investors may engage in.
On the date of publication, John Jagerson & Wade Hansen did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
John Jagerson & Wade Hansen are just two guys with a passion for helping investors gain confidence — and make bigger profits with options. In just 15 months, John & Wade achieved an amazing feat: 100 straight winners — making money on every single trade. If that sounds like a good strategy, go here to find out how they did it.