Options Traders React to McDonald's Earnings Miss

Options activity is running at four times the intraday average

Deputy Editor
Jan 27, 2022 at 10:21 AM
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McDonald's Corp (NYSE:MCD) stepped into the earnings confessional this morning, where the blue-chip fast food giant missed fiscal fourth-quarter top- and bottom-line estimates. The company reported earnings of $2.23 per share, marking its fourth miss in eight quarters, on revenue of $6.01 billion. McDonald's noted its results were dinged by higher expenses, though hiking menu prices helped to boost sales. As a result, MCD was last seen down 1.1% to trade at $247.14.

Options activity is ramping up following the event. So far, nearly 3,562 calls and more than 6,709 puts have crossed the tape, which is four times the typical amount seen in McDonald's stock's normally quiet options pits. The two most popular contacts are the weekly 2/4 245-strike put and 1/28 250-strike put, with new positions being opened at both.

This penchant for bearish bets is nothing new, according to MCD's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 86% of readings from the last year, and indicates puts have rarely been more popular.

When we last checked in on McDonald's stock, the security hit an all-time high as Piper Sandler brushed off the pressures of rising costs and operation challenges. MCD has pulled back significantly since then, with today's pullback putting the shares at risk of closing below the 150-day moving average for the first time since March 2021. In the first month of 2022, the stock has shed nearly 8%.


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