How a 7% Loser Turned Into a 6% Winner in 12 Months with Options

Here is a chronological list of distinct topics, claims, and statements from the transcript:

1. The immediate goal is to dissect and examine a Starbucks stock position right now, focusing on every transaction over the past year.
2. The analysis will include dividends, commissions, and fees to determine the final basis for the Starbucks trade.
3. For calculation purposes, the Starbucks price is locked at $85.50, acknowledging the live price is $85.44.
4. The project serves as a case study for long-term investors who aim to actively trade around a core stock position.
5. The current Starbucks position consists of 100 shares and a long, deep in-the-money call option, which was used as a substitute for dollar-cost averaging by buying additional shares.
6. The project began approximately one year ago, on December 27th, 2024, with the purchase of Starbucks shares at $92.18.
7. The analysis will involve manually tracking and tallying all transactions in an "old school style."
8. The first premium tranche involved selling a call option for 93 cents and buying it back for 16 cents, resulting in a 77-cent profit.
9. The second premium tranche involved selling another call option for $1.60 and buying it back for 31 cents, yielding a $1.29 profit.
10. The first "earnings bonanza" on April 29th included three separate earnings trades for Starbucks, which are being included for full transparency.
11. A long call spread from the first earnings bonanza resulted in a 35-cent profit.
12. A short put (an 80 put) from the first earnings bonanza was sold for $3.10 and bought back for $1.08, generating a $2.02 profit.
13. An expected move butterfly from the first earnings bonanza was bought for $1.38, and a small part of it (an 85 call) was closed for 14 cents, resulting in an overall loss of $1.24 on the butterfly.
14. The third premium tranche on June 12th involved selling a call for $1.33 and buying it back for 29 cents, resulting in a $1.04 profit.
15. The fourth premium tranche involved selling a call for $1.90 and buying it back for 35 cents, resulting in a $1.55 profit.
16. A second earnings butterfly was bought for 93 cents but expired worthless, resulting in a 93-cent loss.
17. The fifth premium tranche involved selling a call for 85 cents and buying it back for 56 cents, resulting in a 29-cent profit.
18. The sixth premium tranche involved selling a call for $1.00 and buying it back for 31 cents, resulting in a 69-cent profit.
19. A third earnings trade on October 29th involved buying a butterfly for $2.04 and selling it the next day for $2.31, yielding a 27-cent profit.
20. The dollar-cost averaging substitute, a deep in-the-money call, was purchased for $26.70.
21. Total commissions and fees incurred over the 12-month period for all Starbucks activity amounted to $24.26.
22. A total of $245 in dividends was collected from the Starbucks position ($61, $61, $61, and $62 installments).
23. The total premium captured from all transactions, including earnings trades, amounted to a profit of $6.10 per share.
24. The total dividends collected averaged $2.45 per share.
25. Total commissions and fees, when converted to a per-share basis, amounted to 25 cents per share (rounded from $24.26 total for 100 shares).
26. The initial share purchase price was $92.18, and the current calculated price is $85.50, representing a $6.68 per-share loss on the stock itself.
27. The deep in-the-money call option, bought for $26.70, is currently marked at $30.70, indicating a $4.00 profit on this specific component.
28. The overall Starbucks project, after accounting for all transactions (premium capture, dividends, commissions, share price change, and the DCA substitute), resulted in a total profit of $5.62 per share over the last 12 months.
29. The Starbucks stock experienced a 7.25% drop in price during the 12-month period (from $92.18 to $85.50).
30. Despite the stock's 7% decline, the active management strategy generated a 6.1% profit on the original investment.
31. The profitability was primarily achieved by actively selling premium, specifically calls, when the stock rallied, and doing nothing when the stock declined to maintain upside exposure.