Options Intelligence Report: McDonald's Corp. (MCD) & Saks, Inc. (SKS)
MCD ñ McDonaldís Corp.
Some McDonalds Put Sellers Are Loviní It!
Egg McMuffin-maker, McDonaldís Corp., experienced a 1.5% rally in shares to $62.57, allowing some investors to bank significant profits today. Shares of worldís largest restaurant company increased on news that global sales rose 3.3% in October. A couple of traders lined their pockets with profits by closing out short put positions in the December contract.
It appears one investor originally sold 10,000 puts short at the December 50 strike, receiving 2.00 apiece back on June 8, 2009, when shares were trading at $58.52. Today the trader purchased to close the short position by buying back all 10,000 puts for just 6 pennies each. Net profits enjoyed on the transaction amount to 1.94 per contract for a grand total of $1.94 million. A similar strategy was employed at the higher December 52.5 strike.
It looks like another trader sold 18,000 puts short at the higher strike, taking in approximately 2.00 in premium per contract, back on July 23, 2009. The investor was able to buy back the put options for just 9 cents apiece today because of the run up in shares since the short sale was established. Net profits amount to approximately 1.91 per contract for total gains of about $3.438 million.
SKS ñ Saks, Inc.
The high-end luxury fashion retailer edged onto our ëhot by options volumeí market scanner today after an investor initiated a calendar roll on the stock. Shares jumped 6.2% to $6.51 on news that same store sales increased 0.7% last month. The trader received 7 pennies per contract for rolling 7,500 calls from the now in-the-money November 5.0 strike, up to the December 7.5 strike where he purchased the same number of contracts for 22 cents each.
It appears the investor rolled the calls forward at a net loss because he originally purchased the November 5.0 strike calls for between 70-80 cents apiece back on September 18, 2009. Shares of SKS must rally at least 19% from the current price for the investor to break even at $7.72 by expiration in December.
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