Starbuck’s (SBUX) is up $2.81 to $44.21 and one strategist sells 7700 April 43 puts on the stock at $3.80 to buy 11400 April 39 puts for $2.45, creating a 2X3 put ratio back spread for a 25-cent credit. Position looks opening and a bet that shares will either 1) hold above $43 and the credit is kept or 2) see a dramatic move lower and the position begins to make money from net negative deltas.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.