Traders Bet on McDonald’s Corporation (MCD) to Hit Triple Digits

Even after a disappointing earnings report, McDonald's Corporation (NYSE:MCD) calls are popular today

Apr 22, 2015 at 11:12 AM
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Even though McDonald's Corporation (NYSE:MCD) released uninspiring first-quarter numbers this morning, the shares of the fast food stock were 4.3% higher at $98.93 at last check. The rise in price comes after the company announced a new "turnaround plan" -- featuring a simplified menu with healthier options. Looking in on a different type of option reveals some traders see additional upside for MCD. That is, calls are crossing at nine times the usual intraday rate, more than doubling put volume.

The equity's most popular contract by a wide margin is the May 100 call, where over 14,500 contracts have crossed. Data suggests speculators are buying to open the options, with hopes of the shares toppling the century mark before front-month options expire at the close on Friday, May 15.

Even with heavy call buying over the past two days, data reveals MCD speculators have actually been buying to open more puts than normal during the past two weeks. Looking at numbers from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio comes in at 1.15, which outranks 87% of readings from the past year.

Since closing right at $100 on March 2, triple-digit territory has been a tough nut to crack for McDonald's Corporation (NYSE:MCD). Its breakout attempts were capped just below this level late last month, and today the shares began paring their gains after hitting $99.35.

 

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