Happy November!
In case you haven't seen my Instagram Stories, the dates for my next options course have been confirmed and will be happening in less than 3 months with the live classes happening on 10 & 11 Jan and 17 & 18 Jan 2025.
I'm still sorting out some admin stuff, but I expect to share the link to indicate your interest in just a few weeks, so look out for it.
This week:
$1,052 profit in Starbucks (SBUX)
$1,052 profit in SBUX
On the 1st of March, SBUX was trading at $93.16.
On the 20th of September, it was trading $96.05.
Someone who entered and exited on those dates would have made $2.89 or 3.1% ROI
I entered a SBUX position on those exact dates, and existed with realized profits of $1,052.
How? By using options of course!
I started by selling a put at the $90 strike - which was promising to buy 100 shares of SBUX if it dropped below $90.
Unfortunately that's what it did between May and August, dropping to a low of about $72.50.
I held on the position through that period, collecting the dividend, and eventually when the stock recovered, I sold a covered call at $95 for the option cycle expiring Sep 20.
That would allow me to sell my shares at $95 per share if SBUX closed above $95, and from the chart above, you can see that's what happened.
So let's walk through all the different phases of the trade:
First, profits from selling put options at $90 = $270
Next dividends from holding the stock through the period = $57
Next, profits from selling the $95 covered call = $225
Finally, I had to buy SBUX at $90 a share, but I sold them at $95 a share, so that's $500 in capital gains as well.
Total realized profit = $1,052
This isn't the first time I've shared such trades, the last being $681 in realized profits in CLX, you can read about that trade at the link below.
Just a note that I won't be including the capital gains as part of the profit when I do the monthly update, primarily because I don't want to inflate the number.
As always, this trade (and all trades I post here) are real trades with real money in my own portfolio and shared with my private community and updated in close to real time.
Even though this was a “problematic” trade that was in the portfolio for nearly 7 months, the eventual returns of $1,052 paid for itself 3 times over (subscribing for 7 months would have cost $343)
And that's just on one trade! Meaning all other trades were pure profit.
You can find out more about the Bread Crumb subscription at the link below.
Closing thoughts & useful links
A lot of the focus this week was on earnings and they didn't disappoint, providing the opportunity to open a bunch of new trades.
Of course, all the focus next week will be on the election and what the outcome means for the markets.
I expect a lot of noise which I will ignore and focus on my strategy to generate cashflow.
Have a good weekend!
Free mini course: Kickstart your personal finances in 5 weeks
Latest Youtube video: comparing my 8 income streams in 2023 vs 2022
Improve your financial life with my budget and wealth tracker that helps to allocate your budget, calculate savings rate, track your sinking funds, net worth and progresses towards FIRE with minimal input from you - most of it is automated.
Sign up for real time updates (not recommendations) within my portfolio with the Bread Crumb subscription
This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.