Option Trade 
McDonald's Corporation (NYSE:MCD) Calls 
Tuesday, January 26, 2016

**OPTION TRADE: Buy the MCD Jun 2016 120.000 call (MCD160617C00120000) at approximately $4.50. Place a pre-determined sell at $9.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.90.

by Ian Harvey

January 26, 2016

McDonald's Corporation (NYSE: MCD) shares opened to a record high Monday after the world’s largest restaurant chain reported positive news on the revenue and sales fronts, but, again, due to the market downturn, the price is almost back to where it started. This however, means that a good entry price is provided for this option trade.

The new President and CEO Steve Easterbrook, who took over the Oak Brook, Illinois-based company last spring, have fought to maintain market share – successfully it appears.

The company credited unseasonably warm fall and early winter weather and the kickoff of its breakfast-all-day menu in October for an uptick in same-store sales, a key retail performance metric that excludes stores that were opened since the same quarter the previous year.

McDonald’s stock is up more than 35 percent for the past 12 months. Since the start of the year, McDonald’s shares have risen about 2.5 percent, well above the S&P 500’s loss of about 7 percent since the start of the year.

The company’s fourth-quarter unadjusted net income rose to $1.21 billion, or $1.31 per share, from $1.1 billion, or $1.13 per share, in the same quarter of 2014. Revenue increased to $6.34 billion from $6.57 billion. The company shattered forecasts from analysts polled by Thomson Reuters, which expected revenue to decline. Global same-store sales increased 5 percent, well above a FactSet consensus estimate of 3.2 percent.

For the year, revenue dropped to $25.41 billion, from $27.44 billion in the prior period. Net income declined to $7.15 billion from $7.95 billion.

Nomura last week raised its U.S. McDonald’s stores sales forecast for the current quarter and reiterated its “Buy” recommendation.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the MCD Jun 2016 120.000 call (MCD160617C00120000) at approximately $4.50. Place a pre-determined sell at $9.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.90.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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