Starbucks Corporation (SBUX) Traders Keep Focus On Puts

Starbucks Corporation puts were bought and sold to open on Friday

Digital Content Group
Nov 3, 2014 at 10:15 AM
facebook twitter linkedin


Starbucks Corporation (NASDAQ:SBUX) dropped 2.3% on Friday in the wake of a poorly received quarterly earnings report and subsequent round of price-target cuts. These developments prompted traders to rush the java giant's options pits, where total volume swelled to five times the daily average.

SBUX's most active option was the out-of-the-money January 2015 72.50-strike put, which saw 5,107 contracts change hands. Activity was split fairly evenly between the bid and ask prices, and open interest spiked over the weekend, suggesting positions were initiated by sellers and buyers, respectively. Breaking things down further, Friday's put writers anticipate SBUX will retain its perch atop $72.50 through January options expiration, while the buyers expect the shares to descend below the strike within the same time frame.

This morning, Starbucks Corporation (NASDAQ:SBUX) is 0.5% higher at $75.91, but remains 3.2% south of breakeven on a year-to-date basis, and has underperformed the broader S&P 500 Index (SPX) over the last three months. Not surprisingly, short-term traders have displayed a marked preference for puts over calls recently, as was evidenced on Friday. Specifically, SBUX's Schaeffer's put/call open interest ratio (SOIR) of 1.12 ranks in the put-skewed 78th percentile of its annual range.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners