Consumer Cyclical
SBUX
Starbucks Corporation
Steady income from Starbucks (SBUX) using covered calls and cash secured puts. Dividend plus premium for conservative income strategy.
Monthly Premium1.2-2.0%
Annualized Return14-24%
Stock Price$95-110
IV RankLow-Moderate (25-40)
Options LiquidityVery Good
Dividend Yield2.5%
Why SBUX for Covered Calls & Cash Secured Puts?
SBUX offers stable income with dividend plus premium. Strong brand with global expansion potential. Good for conservative income investors who want consumer exposure.
Example Covered Call Trade
SBUXCovered Call
Strike Price$105 (5% OTM)
Expiration30 days
Premium$1.80 per share
Return If Flat1.8% ($180)
Return If Called6.8% ($680) + dividend
Keep Probability72% keep shares
Recommended Strategy for SBUX
Sell conservative calls 5-6% OTM to supplement the dividend. SBUX is great for steady income without high volatility.
Risks to Consider
- China market challenges
- Labor costs rising
- Competition from local cafes
- Consumer spending sensitivity
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