Let's officially add the above JO trade to the STP:
- Selling 10 Starbucks (SBUX) 2019 $45 puts for $4 ($4,000)
- Buying 40 Coffee (JO) June $22 calls for $3.40 ($13,600)
- Selling 40 Coffee (JO) June $26 calls for $1.70 ($6,800)
That's net $2,800 on the $16,000 spread so $13,200 upside potential and really all we care about is the $9,200 we hope to make off the bull call spread. Once we're done with that, we'll roll the SBUX short puts to the LTP unless they are already down 50%, which is unlikely with rising coffee prices!
Of course that means we're long /KCN7 (July) again at $1.69 too!