Options Traders Respond to McDonald's Profit Miss

Puts are popular in the options pits

Digital Content Manager
Apr 30, 2024 at 10:20 AM
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Blue-chip fast food giant McDonald's Corp (NYSE:MCD) reported smaller-than-expected first-quarter earnings $1.70 -- its first miss in roughly two years -- as well as a revenue beat. The company noted consumers are "more discriminating with every dollar they spend," with global comparable sales growth falling and conflict in the Middle East dinging international sales.

MCD was last seen down 0.7% at $271.58, but gapped to its lowest level since November earlier in the session. The security's latest rally ran into resistance at the $280 level, which coincided with pressure from the 40-day moving average. Today pacing for a fourth loss in five sessions, the stock is down 9.3% in 2024.

Pessimism is prevalent over in the options pits, where McDonald's stock's 10-day put/call volume ratio of 1.06 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 82% of annual reading. This indicates puts have been getting picked up at a quicker-than-usual pace over the last two weeks.

Drilling down to today's options activity, 12,000 puts and 10,000 calls have crossed the tape, which is six times the volume typically seen at this point. The weekly 5/3 275-strike call is the most active contract, followed by the 265-strike put in that series, with positions being opened at both. 

 

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