Tim Biggam's McDonald's Corporation Trade

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Tim Biggam of Delta Derivatives spoke on
Bloomberg Markets
about a bearish options strategy in
McDonald's CorporationMCD
. Biggam noticed that implied volatility in
McDonald's Corporation
is very low, which makes its options very cheap. He wants to take a short position because price to earnings ratio for the stock is at its highest level in over five years. Low volatility allows him to use a simple options strategy, so he wants to buy the June 125 put for $1.90. The trade breaks even at $123.10 or 4 percent lower from the current stock price.
Posted In: MediaConsumer DiscretionaryDelta DerivativesRestaurantsTim Biggam
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