Starbucks recovery plan is working. Here's how Mike Khouw says to trade the coffee giant

Starbucks' recovery plan appears to be gaining traction, which is likely to be a positive development for investors. The coffee giant has been working to revamp its business, and if successful, it could lead to increased sales and profitability. For options traders, this news may present opportunities to capitalize on potential future gains.

Mike Khouw's approach to trading Starbucks through options suggests that he's taking a nuanced view of the company's prospects. By using options, Khouw is able to manage risk while still taking a position on the stock. This strategy can be particularly useful in situations like this, where the outlook is improving but there are still uncertainties to consider. Industry-wide, the coffee shop segment has faced challenges in recent years, but Starbucks' efforts to adapt and innovate may position it for success.

To watch next, investors should keep an eye on Starbucks' upcoming earnings report and same-store sales data. If the company's momentum continues, it could lead to increased investor confidence and a higher stock price. Options traders may want to consider strategies like buying calls or selling puts, but it's essential to carefully evaluate the risks and rewards before making any trades. As always, a thorough understanding of the underlying stock and market conditions is crucial for making informed investment decisions.

Originally reported by cnbc.com. OptionNews adds analysis for finance & markets readers.