McDonald’s Corporation (MCD) Bulls Eye Last-Minute Gains

McDonald's Corporation (NYSE:MCD) same-store sales were better than many expected

May 8, 2015 at 11:24 AM
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McDonald's Corporation (NYSE:MCD) is 2.1% higher today at $98.85, after the company reported a slimmer-than-expected drop in same-store sales for April. Options traders are rushing in, with calls crossing at four times the average intraday rate. It appears speculators are buying to open the weekly 5/8 98-strike call, betting on additional gains above $98 by today's close, when the series expires. 

Short-term calls have been popular in the security's options pits for some time. MCD's Schaeffer's put/call open interest ratio (SOIR) stands at 0.46, revealing call open interest more than doubles put open interest among options expiring in the next three months. Plus, this ratio sits in the bottom quartile of its annual readings, meaning short-term speculators have preferred calls over puts more than usual. 

Optimism is by no means the rule, though. In fact, if the shares can continue their upward momentum, they may be in store for some bullish analyst attention. For example, 15 of 22 brokerage firms consider the stock a "hold" or worse, while its average 12-month price target of $101.18 is just a stone's throw away from current trading levels. As it stands now, McDonald's Corporation (NYSE:MCD) is 5.5% above its year-to-date breakeven mark. 

 

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