Beyond Meat Calls Pop After McDonald's Team-Up

McDonald's will test Beyond Meat patties in Canada

Managing Editor
Sep 26, 2019 at 12:13 PM
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The shares of Beyond Meat Inc (NASDAQ:BYND) are in focus this morning, after news that McDonald's (MCD) will test a new plant-based burger in Canada using Beyond Meat patties. The 12-week test will feature the plant-based burger in 28 restaurants in Ontario. In response to the link-up with the golden arches, BYND options traders are coming out in droves today.

In just the first few hours of trading, already 72,000 options have changed hands, four times the average intraday volume and pacing for the 97th percentile of its annual range. Leading the charge are the weekly 9/27 160- and 155-strike calls, and there are also new positions being opened at the weekly 9/27 170-strike call.

In response, Beyond Meat stock is up 10.3% to trade at $152.10, on track for its best day since July 17. The move higher today snaps a three-day losing streak, although the shares are still staring up at their 40-day moving average, a trendline not conquered on a closing basis since Aug. 5.

BYND Stock Chart

The emphasis on calls today runs counter to the recent options trend. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio of 1.44.

Whatever the motive, now is an opportune time to speculate on BYND's short-term trajectory with options. The stock's Schaeffer's Volatility Index (SVI) of 71% is in the 16th percentile of its annual range, meaning short-term options on the security are relatively inexpensive at the moment, from a volatility standpoint.

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