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Volatility can play well into the hands of traders. The best part is that it works whether you are bullish or bearish. All you need is for stocks to move.
One stock Money Morning's options trading specialist, Tom Gentile, is following right now is ready for a quick move to the upside. Here's how you can play Starbucks Inc. (NASDAQ: SBUX) for profit potential.
When the market is a bit dicey, almost every financial advisor will recommend consumer staple stocks to help you ride out the bad times in the market.
Why? Because such items as soap, corn flakes, and toilet paper are always in demand. No matter what is going on in the economy, people will still buy these products. That flat screen or vacation can wait.
Restaurants and other outlets for prepared food are also cut back when times are rough. But Tom sees Starbucks as an exception.
People still love their coffee, and even the relatively expensive venti latte is still only a few dollars. It's a small luxury in good times and in bad, and if you've driven or walked by your local outlet, you will see it is still quite crowded.
The stock has also performed relatively well…
Why Starbucks Stock Is a Steal
Just take a look at how the stock has performed this year.
At the depths of the pandemic bear market, Starbucks stock was trading around $50 per share. It rallied up to the $70s, where it spent most of the summer. But now it has broken out to the upside and looks quite strong.
At a recent price of $90, it is just about back to its 52-week high. Tom thinks it will reach $100 in short order, too.
How does he know? Well, nothing in the market is guaranteed. But his proprietary Money Calendar shows the seasonal effect over the past 10 years. According to the calendar, 80% or more of all bullish trades on Starbucks were successful in the month of October.
That's a pretty good record.
Now, you could just buy the stock and wait for it to go up. But there are so many other ways to profit.