Earnings Trade of the Day (SBUX) 1.25.2012

Trade: Buying the SBUX February 50-47-44 Put Fly for $1.02.  I bought the Feb 50 and 44 Puts and sold twice as many 47 Puts.
Profitable: I make money on this trade if SBUX Closes between $45.02 or $48.98 by February 17, 2012.
Break-even: I break-even on this trade if SBUX Closes at $45.02 and $48.98 by February 17, 2012.
Unprofitable: This trade is unprofitable if SBUX Closes under $45.02 or above $48.98 by February 17, 2012.  The most I can lose on this trade is the amount I paid for this spread, $1.02.

Reason I like this Trade: To be honest, I like this trade, because in a stock like SBUX I like to sell premium into earnings especially because MCD sold off and did not make a big movement.  This is a great risk vs reward trade in my opinion.  I can make $198 on a 1 lot vs losing $102 and if the stock closed here on expiration it would be profitable.  This is very very small position, but I will play this for earnings.  Please feel free to email me with any questions at  This email address is being protected from spambots. You need JavaScript enabled to view it. .

Reason I like this Trade: To be honest, I like this trade, because in a stock like SBUX I like to sell premium into earnings especially because MCD sold off and did not make a big movement.  This is a great risk vs reward trade in my opinion.  I can make $198 on a 1 lot vs losing $102 and if the stock closed here on expiration it would be profitable.  This is very very small position, but I will play this for earnings.  Please feel free to email me with any questions at  This email address is being protected from spambots. You need JavaScript enabled to view it. .

UPDATE: 1.30.2012 I took this position off for $1.28, I think it might work out better, but I want to take profits and move on.  I was right, made good profits, so why not just take it off as I have positions in about 40 stocks so one less I have to worry about.  This trade was good for 25% profits in 3 trading days, time to move on.