This is a serious question. I am not short. I have traded long here in the past. I just read an excellent analysis from an excellent source and he loves SBUX but there is a serious overhang facing the company. The multi- billion (1.9 B ? ) pending arbitration between Kraft and SBUX. If they lose and they very well might it is a material change of enormous magnitude. You can argue that it is a one time event and they are reserving but the impact is not priced into the stock today. Should I wait and buy on the pull back ? Or buy now ? What do you know about this lawsuit ?
Nonsense,You would sell a put to unload your stock, called insurance.
You buy the put if you want a chance at getting it cheaper.Thus you would increase your holding.
Obviously , you are a novice. If it goes down, after you've sold the put, this is a lose-lose deal.
You are incorrect. They are not reserving - they publicly stated that they have set up no reserves. SBUX has offered $750 million to settle and Kraft turned them down, so Kraft defintitely believes that SBUX will lose. There is no insurance coverage for breech of contract. SB*X will have to cut dividend and stop all stores in China and everywhere.