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July 2, 2009 10:09 EDT 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.
Recapping Jim Cramer’s McDonald’s (MCD) Pick and Corresponding Option Plays
Recapping Jim Cramer’s McDonald’s (MCD) Pick and Corresponding Option Plays
July 2, 2009
Mad About Options takes a look at the stocks getting coverage from Jim Cramer 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):
In an April broadcast of Mad Money, Jim Cramer told viewers that he is “bullish” on McDonald’s (MCD). MCD shares have rallied to $57.46 from $54.14 at the time of Cramer’s report, making this a 6% winner for bullish MCD investors.
Bullish Option Traders:
Option traders who were similarly bullish on MCD sold Sept. 55 puts for $4.90 and bought Sept. 40 puts for 80 cents. Investors collected $4.10 on this trade, and the spread is now marked at $1.55 per contract. This trade is a winner of $5.65, with the stock up $3.32.
Bearish Option Traders:
On the con side, investors bought Jan. 2010 65 puts for $13.60, meaning they paid that amount for the trade. Investors needed the puts to expire lower than $51.40, but the stock is not yet down to that level. The puts are now marked at $9.80, making this a lower of $3.80 with the stock up $3.32.
For more trading ideas and breaking news on the options market, stay tuned in to www.ONN.tv.
