On Friday’s Options Action, the crew analyzed the performance of the restaurant sector. Restaurant stocks have made little progress over the past 3 years and performed even worse on a relative basis to the market. McDonald’s has recently broken below a major bullish trendline and completed a head & shoulders formation, suggesting a possible move lower. Coupled with rising food and labor costs, profitability will likely be compressed. Expecting MCD to trade lower, Michael Khouw suggests buying a July 145/150/160 Put Butterly for a $2.20 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: MCD Options Action