MNV
Market News Video
MNV MNV 10 Stocks Crossing Below Book Value
MNV
MNV
MNV
MNV
MNV
MNV
MNV
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

Notable ETF Inflow Detected - XLY, HD, MCD, GM
Thursday, September 30, 10:49 AM ET, by Market News Video Staff

Symbols mentioned in this story: XLY, HD, MCD, GM Exchange traded funds (ETFs) trade just ...

MCD November 12th Options Begin Trading
Thursday, September 30, 11:07 AM ET, by Market News Video Staff

Investors in McDonald's Corp (MCD) saw new options begin trading today, for the November 12th ...

Noteworthy Friday Option Activity: NOG, NAT, MCD
Friday, October 1, 3:36 PM ET, by Market News Video Staff

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume ...

Noteworthy Monday Option Activity: MCD, UPS, DELL
Monday, October 11, 3:37 PM ET, by Market News Video Staff

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy ...

5 Dividend Aristocrats Where Analysts See Capital Gains
Tuesday, October 12, 11:43 AM ET, by Market News Video Staff

To become a "Dividend Aristocrat," a dividend paying company must accomplish an incredible feat: consistently ...

January 2024 Options Now Available For McDonald's (MCD)

By Market News Video Staff, Monday, September 13, 11:22 AM ET
Play Video: The Importance of ETFs


If the video does not load after a few moments, Upgrade to the Latest Flash Player.
Email EnvelopeFree Email Alerts By Stock:
Get Dividend Alerts
Get SEC Filing Alerts

Investors in McDonald's Corp (NYSE:MCD) saw new options begin trading today, for the January 2024 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 858 days until expiration the newly trading contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MCD options chain for the new January 2024 contracts and identified one put and one call contract of particular interest.

The put contract at the $220.00 strike price has a current bid of $21.50. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $220.00, but will also collect the premium, putting the cost basis of the shares at $198.50 (before broker commissions). To an investor already interested in purchasing shares of MCD, that could represent an attractive alternative to paying $241.70/share today.

Because the $220.00 strike represents an approximate 9% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 66%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 9.77% return on the cash commitment, or 4.16% annualized — at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for McDonald's Corp, and highlighting in green where the $220.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $250.00 strike price has a current bid of $22.00. If an investor was to purchase shares of MCD stock at the current price level of $241.70/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $250.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 12.54% if the stock gets called away at the January 2024 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if MCD shares really soar, which is why looking at the trailing twelve month trading history for McDonald's Corp, as well as studying the business fundamentals becomes important. Below is a chart showing MCD's trailing twelve month trading history, with the $250.00 strike highlighted in red:

Considering the fact that the $250.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 56%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 9.10% boost of extra return to the investor, or 3.87% annualized, which we refer to as the YieldBoost.

The implied volatility in the put contract example is 27%, while the implied volatility in the call contract example is 20%.

Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $241.70) to be 16%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.


This Article's Word Cloud:   Channel   Corp   January   McDonald   Options   Stock   YieldBoost   also   call   chart   contract   contracts   covered   current   data   expiration   expire   fillColor   greeks   history   implied   investor   left   month   odds   option   options   premium   price   represent   return   sell   shares   stock   strike   that   they   this   those   time   today   trading   trailing   twelve   volatility   which   will   with   worthless   would
MNV
MNV
About Us - Advertise - Contact Us - Embedding Videos - Licensing Videos - Partners - mRSS / RSS Feed - Terms of Use - Privacy Policy
MNV
Home  |  Analyst News  Dividend Report  ETFs  Insider Report  Large Caps  Market Movers  Week Ahead Report  Weekly Market Wrap
MNV
MNV MNV Stock Message Boards Stock Market Definitions
MNV

January 2024 Options Now Available For McDonald's (MCD) | Market News Video | Copyright © 2008 - 2021, All Rights Reserved

Any ideas and opinions presented in all Market News Video clips are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.