Morgan Stanley (MS) was the latest financial stock to earn quarterly profits in the Billions. Shares are trading higher by over 4% this morning, up $1.39 to $31.84 per share. Hopefully you were able to act on our suggestion from yesterday, taking in a months worth of gains in one day. We have already closed out our position this morning.
For today’s trade we are going to continue to look for ways to profit ahead of a companies earnings. We are suggesting getting long shares of Starbucks (SBUX) which is trading just above $25 right now. Protection at the $23 level is cheap, with the puts trading at $.20. In fact if you are looking to get a more levered play ahead of the report, we would suggest buying the $23 straddle. For those of you new to trading options, you are buying the May $23 calls ($2.30) and the $23 puts for ($.20).
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