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December 8, 2009 7:49 EST Related Symbols: MCD
you're watching:
Mad About Options
An options-related take on Jim Cramer's latest recommendations and analysis on the latest securities and ETFs getting attention on the Street.
ONN.tv analyzes winning and losing strategies on McDonald’s
Mad About Options takes a look at the stocks getting coverage from Jim Cramer, Fast Money casts and other heavy hitters in the financial press and reviews strategies option traders might have used if they agree or disagree with these assessments of the underlying stocks.
The Pick – McDonald’s (MCD)
On Sept. 11, Mad Money host Jim Cramer said MCD is “too consistent, and this market doesn’t want consistency.” He preferred CKE Restaurants or Wendy’s instead, among names in the fast-food space. MCD shares are now trading at $62.00, up from $54.39 at the time of the previous Mad About Options episode that highlighted this stock.
Bearish Option Traders on MCD:
We pointed out on September 16 that bearish investors were selling two December 50/45 put spreads for 70 cents each and selling two December 55/60 put spreads for $1.40 each. These investors were collecting $4.20 for the entire trade. The iron condor trade is now marked at $4.70 apiece, or $9.40 total. This strategy was a loser of $5.20 as the stock increased by $7.61.
Bullish Option Traders on MCD:
Bullish investors were buying two January 2011 45 calls for $11 each, paying $22 for the pair. These calls are now marked at $17.40 apiece, making the pair worth $34.80. That’s a winner of $12.80, with the stock up $7.61.
