) -- which has dominated the headlines recently due to CEO Howard
statement on guns
-- received a price-target hike to $85 from $82 at BMO this
morning. This shouldn't be entirely surprising, given the shares'
42% year-to-date gains, and yesterday's record high of $77.85. In
fact, during the past 40 sessions, the coffee king has outperformed
(INDEXSP:.INX ) by more than 13 percentage points.
Speaking of yesterday, SBUX's options pits were busy, with call and
put volume both about doubling the norm. This included the
initiation of a 4,500-contract, bullishly skewed, three-legged
spread, constructed around the April series. In terms of individual
strikes, however, the most actively traded was the October 75 put,
where north of 3,500 contracts changed hands.
Digging deeper, over two-thirds of the action at that strike
occurred on a block trade of 2,668 contracts, which traded above
the ask price, at $1.03 each -- suggesting they were purchased.
Open interest at the strike added roughly 3,100 contracts
overnight, as well, so new long positions were likely created. In
buying the Starbucks puts to open, the speculator is betting the
shares -- currently sitting at $76.50 -- will breach $73.97 (strike
price less premium paid) before the close on October 18, when the
soon-to-be front-month options expire. If the stock continues to
hover above the strike, however, the trader risks forfeiting his
initial cash outlay.
At the same time, given Starbucks Corporation's technical tenacity,
Thursday's big put buyer and his cohorts may not all be of the
bearish breed. In fact, they may be shareholders seeking short-term
protection on their long stock positions, in case the java giant
takes an unexpected tumble. SBUX is tentatively scheduled to
release earnings at the end of October, after October-dated options
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