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Potential Starbucks (SBUX) Trade Targets 2.55% Return

Jan 03, 2018 ( via COMTEX) --

For a hedged play on Starbucks (<a href="">SBUX</a>) MarketIntelligenceCenter.comaEUR(TM)s patented trade-picking algorithms selected a Feb 16, 2018 $57.50 covered call for a net debit in the $56.07 area. That is also the break-even stock price for the covered call. This trade will return 2.55%, or 21.15% annualized (for comparison purposes only), in 44 days. This covered call also provides 2.70% downside protection. A lower-cost play on Starbucks would use a longer term call option in place of the long position in the stock. Look at the Jan 18, 2019 $30 call and the same sold call for a net debit of $25.58.This trade only has 3.53% downside protection, but the assigned return rate rises to 7.46% or an annualized rate of 61.91% (for comparison purposes only). The current 52-week low is $52.58 and the 52-week high is $64.87. Starbucks stock has been showing support around $57.04 and resistance in the $58.50 range. The stock closed Jan 2, 2018's trading session at $57.63.A

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