McDonald's Agrees to Terms of Sale for Russian Business

Options traders have favored MCD puts in recent weeks

Deputy Editor
May 19, 2022 at 1:28 PM
facebook twitter linkedin


McDonald's Corp (NYSE:MCD) "Golden Arches" are leaving Russia. The blue-chip fast food giant is selling its business to its current licensee in the market, Alexander Govor. Financial terms of the sale were not released, though McDonald's said it expects a record noncash charge of $1.2 billion to $1.4 billion. Govor will acquire all existing locations in Russia, and rebrand them under a new name.

McDonald's stock is trading 0.2% lower following the announcement, last seen at $230.03. Clinging to a 0.3% year-over-year lead, MCD still sits nearly 14% below its 2022 breakeven mark. Despite the lackluster price action, the shares remain off their March 10 12-month low of $217.67, when MCD -- alongside sector peer PepsiCo (PEP) -- was contemplating suspending its operation in Russia in response to the country's unprovoked invasion of Ukraine.

Options traders have favored bearish bets in recent weeks, with MCD's 10-day put/call volume ratio of 1.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) standing higher than all other readings from the past year. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.27 stands higher than 85% of readings from the last 12 months, indicating a clear put-biased amongst short-term options traders.

However, McDonald's stock ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 23 out of 100. This means the security has consistently realized lower volatility than its options have priced in, making it a potential premium-selling candidate

 

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

SCHAEFFER'S JULY STOCKS REPORT AD
 


 


 
Special Offers from Schaeffer's Trading Partners