On April 22, I sold a put in Starbucks. The trade:
Sold 1 SBUX Put Jan 15 '16 $45 Put @ 2.25 ($11.20 commission + $0.01 SEC fee)
Days Held (sell date to expiry): 268
Net Premium: $213.79
Annualized Return = ($213.79 / ($4,500 - $213.79)) * 365/268 = 6.79%
The most likely outcomes of this trade are:
1. Shares are trading above $45.00 at expiration. I will get to keep $213.79 in net premiums.
2. SBUX is trading below $45.00 at or before expiration and shares are assigned. I will receive 100 shares of SBUX at a net cost of $42.86/share.
I don't find SBUX shares attractively valued, but everytime I walk into one of their shops, there's a line-up. And that I like.
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