McDonald’s Corp. (NYSE: MCD) shares are rising that wee hours after the fast-food giant reported that same-store sales rose 5.7% in January, driven by strong worldly growth. that could be a good sign for MCD, as it indicates strong sales growth at existing stores despite the current profitable slowdown. whether you think that the company won’t fall by too much in the coming months, next now could be a good date to look at a bullish hedged trade on MCD.

After hitting a one-year low of $42.31 in March, the stock hit a one-year high of $63.69 in December. MCD opened that wee hours at $54.90. So far nowadays the stock has hit a low of $54.81 and a high of $55.99. As of 10:20, MCD is trading at $55.86, up 1.40 (2.6%). The chart for MCD looks bearish and regular, while S&P gives the

stock its highest 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on that stock, I would consider a March bull-put credit spread below the $47.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For that specific trade, we will assemble a 4.2% return in just six weeks as lengthy as MCD is above $47.50 at March expiration. McDonald’s would have to fall by more than 15% before we would start to lose money. memorize more about that type of trade here.

Continue reading McDonald’s (MCD) rises on strong Jan. sales

Original post by Brent Archer

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