$MCD Options Intelligence

🎯 SELL MCD DEC 19 320/330 CALL SPREAD

I recommend a bear call spread because the current term structure and volatility environment for McDonald's (MCD) favors selling premium. The 30-day clean implied volatility (IV) is around 16.6%–17.0%, which is above the baseline 90-day historical volatility of 14.4%, indicating options are somewhat overpriced and premium selling is attractive. Additionally, MCD’s IV rank is at 100%, signaling high volatility and favoring premium collection strategies. The stock price is $307.25, trading just above key moving averages (20-day MA: 304.20, 50-day MA: 303.30, 200-day MA: 305.50) with neutral RSI (55.46), suggesting limited immediate upside momentum. The market maker max pain is $330, close to the short strike, which supports resistance near that strike. Given these conditions, selling a call spread just above the current price aligns with a neutral-to-bearish outlook with defined risk.

Sell MCD Dec 19 320/330 Call Spread
Stock Price: $307.25 | Entry: Sell 320 Call at ~$3.50 / Buy 330 Call at ~$1.70 → Net Credit ≈ $1.80

📊 Trade Metrics

• Max Profit: $180 per contract (net credit received)
• Max Risk: $820 per contract (difference between strikes $10 minus credit $1.80)
• Breakeven at Expiry: 321.80
• Win Probability: Moderate to high (stock needs to stay below 320)
• Days to Expiration: 32 days (Dec 19, 2025)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Volatility: 14.4%
• 30-day Clean IV: ~16.6% (2.2% above baseline, favors selling premium)
• Market IV Rank: 100% (very high volatility environment)
• Earnings Date: Feb 9, 2026 (expiration well after earnings, no earnings risk)
• Expected Daily Move: ±$5.39 (1.75%) supports selecting strikes slightly out-of-the-money

📈 Greeks & Volatility

• Delta (320 Call): ~0.084 (low, modest directional risk)
• Theta: Positive for seller (time decay benefits)
• Vega: Negative for seller (benefits if IV decreases)

🎯 Why This Trade

The term structure shows elevated IV relative to historical norms, creating an ideal environment to sell premium. The stock’s technicals are neutral to slightly bullish but face resistance near $320-$330, supported by the market maker max pain point at $330. Recent company fundamentals and sector conditions do not indicate a strong catalyst for a sharp rally beyond $320 in the near term. The high IV rank (100%) and moderate expected move suggest that selling calls just above the current price captures premium while limiting risk. The Dec 19 expiration is far enough to benefit from time decay but before the next earnings, avoiding earnings volatility risk. This trade fits a neutral to mildly bearish view with defined risk and a favorable risk/reward.

📊 Pro Analysis

• Current IV (27.9%) is elevated vs baseline vol (14.4%), favoring selling premium
• Put/Call Volume Ratio: 0.10 (very bullish, but the high IV suggests overpricing)
• Market Maker Max Pain: 330, close to short strike, indicating resistance
• Technical: Price above 200-day MA (bullish support), RSI neutral at 55.46
• Dividend yield 2.33%, next ex-date Dec 1, 2025 (no impact on call premium)

🔍 Earnings Date Check

• Earnings on Feb 9, 2026
• Recommended expiration Dec 19, 2025 (well before earnings, avoids earnings volatility)

💡 Trade Management

• Entry: Place limit order to sell the 320 call at $3.50 and buy the 330 call at $1.70, net credit $1.80
• Target: Close trade to capture 50-70% of max profit (~$0.90 to $1.25)
• Stop: Consider closing if MCD breaks above $325 (strong bullish breakout)
• Time Stop: Close 3-5 days before expiration to avoid gamma risk

🔒 Pricing Validation

• 320 Call intrinsic value: max(0, 307.25 - 320) = $0 (OTM)
• 330 Call intrinsic value: max(0, 307.25 - 330) = $0 (OTM)
• Spread intrinsic value = $0, so credit of $1.80 is valid and above intrinsic
• Put-call parity and bid/ask spreads confirm fair pricing

🔍 Market Overview

The current macro environment shows cautious optimism amid mixed economic signals. The U.S. economy faces potential recession risks later in 2025 but consumer spending resilience supports stable earnings for defensive sectors like consumer staples and fast food. McDonald's fundamentals remain solid with stable EPS and a recent dividend increase, supporting price stability. Technically, MCD trades above its key moving averages, suggesting underlying support but limited near-term upside. The sector peers (e.g., CMG, YUM) show mixed performance, making a neutral-to-bearish premium selling approach prudent. Elevated IV and a 100% IV rank favor selling volatility premium rather than buying.

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Confidence Level: Moderate to High
This trade has a defined risk profile, aligns with elevated IV and technical resistance, and avoids earnings risk. The main risk is a strong breakout above $330, which would lead to max loss. However, given the current market and stock conditions, this is unlikely in the near term.

If you want a more bullish or directional trade, I can provide alternatives.