Bulls Lose On McDonald's Corporation (MCD) Sales Slump

McDonald's Corporation has plunged 3.3% following its November sales report

Dec 8, 2014 at 10:09 AM
facebook X logo linkedin


Call buyers have been active in McDonald's Corporation's (NYSE:MCD) options pits in recent months, as evidenced by the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.29, which ranks in the 99th annual percentile. Simply stated, calls have been bought to open over puts with more rapidity just 1% of the time within the past year.

It was a similar set-up on Friday, with calls crossing the tape at a faster-than-usual clip, and outpacing puts by a 2-to-1 margin. Buy-to-open activity was detected at MCD's weekly 12/12 97-strike call, which speculators scooped up at a volume-weighted average price (VWAP) of $0.45. Based on this average entry price, breakeven for the call buyers at this Friday's close is $97.45 (strike plus VWAP). Profit will accrue north of here, while losses are limited to the initial cash outlay, should MCD settle south of the strike at week's end, when the series expires.

Unfortunately for this batch of option bulls, McDonald's Corporation (NYSE:MCD) has plunged 3.3% out of the gate to churn near $93.10 -- and is the leading laggard on the Dow -- after reporting a steep drop in global sales. What's more, the bid price of the weekly 12/12 97-strike call is currently docked at $0.05, meaning Friday's call buyers are already staring at paper losses. Plus, amid today's plunge, delta on the call has fallen to 0.06 after closing last week at 0.36, suggesting a slim 6% chance the option will be in the money at week's end.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI