Carter Worth And Mike Khouw's Bearish McDonald's Trade

Carter Worth analyzed on CNBC's "Options Action" the recent break out in McDonald's Corporation MCD.

He identified the inverse head and shoulders pattern on the three-year chart and he concluded that the measured move higher for the stock is $150. He calculated that difference between the bottom and the neckline is $20 and he added that amount to the neckline to reach $150. Worth thinks that it would be a good idea to take profits or sell short McDonald's.

Mike Khouw thinks that the best way to make a bearish bet is by selling the July 150/155 call spread for a credit of $1.45. If the stock stays below $150 at the July expiration, Khouw is going to collect the total premium. The trade is going to start to lose money above $151.45 and it can maximally lose $3.55.