I was getting bored today so i decided to go looking for a fun, weekly trade to make things interesting.
This is the trade I put on in MCD.
Option Trades Analysis
Why this trade?
Well I own MCD stock and I have been waiting for the stock to increase along with the markets but it has been pretty much range bound. It stays above 95 and below 100. So I put on a trade that says,
In the next 8 days: MCD will stay in between 97.5 and 95. That’s a pretty small range, but it is also a small time frame.
Here is the chart:
The red lines are the breakevens. According to the probabilities this trade has a 60% probability of profit.
Now let’s look at the math.
I got a credit of .56 which for 2 condors is $112. I am using $2.5 spreads, so the margin is $500-$112 = $388.
So $388 is the max I can lose, while the most I can make is $112 or 28.8% ROI in 8 days.
Is this the best trade and best option strategy out there today? Probably not. Is is a good trade? Depends on your reasoning. Will it provide me a bit of excitement? Yup.
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