May 2026 Options Now Available For McDonald's (MCD)

This analysis details two options strategies for McDonald's (MCD) stock, currently trading at $297.46: selling a cash-secured put at the $295 strike and selling a covered call at the $310 strike. The $295 put, with a $17.00 premium, offers a potential 7.08% annualized YieldBoost if it expires worthless (59% probability), providing a $278.00 effective cost basis. Alternatively, a covered call at the $310 strike, with an $18.10 premium, offers a 10.30% total return if called away or a 7.48% annualized YieldBoost if it expires worthless (51% probability), presenting specific income-generating or cost-reduction opportunities for investors.

Analysis

The provided text outlines two specific, long-dated options strategies for McDonald's Corp. (MCD), trading at $297.46, with expirations in May 2026. The first strategy involves selling a cash-secured put at the $295 strike price for a $17.00 premium. This creates an effective cost basis of $278.00 per share if assigned, representing a notable discount to the current market price. Alternatively, if the put expires worthless, which has a stated probability of 59%, the seller would realize a 7.08% annualized return on the cash commitment. The second strategy is a covered call at the $310 strike, generating an $18.10 premium. This approach offers a total return of 10.30% if MCD shares are called away, but caps further upside. If the call expires worthless, a scenario with a 51% probability, the investor enhances their yield by 7.48% annualized. The analysis is supported by volatility data, showing that implied volatility for the put (20%) and call (21%) is modestly elevated compared to the stock's trailing twelve-month actual volatility of 19%, suggesting that option sellers are currently being compensated at a slight premium relative to recent historical price movement.

Key Decisions for Investors

• Investors seeking to acquire MCD shares at a discount to the current price could consider selling the May 2026 $295 cash-secured put to establish an effective cost basis of $278.00 or generate a 7.08% annualized yield.
• Current MCD shareholders looking to generate income and who are willing to cap their potential upside could sell the May 2026 $310 covered call, aiming for a 7.48% annualized yield boost or a 10.30% total return if the stock is called away.
• Given that implied volatility is slightly higher than historical volatility, the premiums for selling these options are marginally attractive, but investors must be comfortable with the long-dated May 2026 expiration.
• Traders should weigh the probabilities presented, noting the 59% chance of the put expiring worthless and the 51% chance for the call, acknowledging that assignment remains a significant possibility in both scenarios.