$MCD daily pick: sell Jan 15 $260 put (buy-side) below the pre-earnings price

$MCD: I'm selling the Jan 15 $260 put on @McDonalds.

At midday ($274.07):
3% under the 200-day and 20% off the March high
About 22x trailing earnings with a 2.8% dividend yield
$4.05 credit, breakeven $255.95
About 1.6% in 63 days (~9% annualized)

I think the downside from here is limited because adjusted EPS still grew 11% last quarter while U.S. traffic was falling. The $260 strike is below where the stock closed the day before that report.

I would rather collect $405 to wait than chase a stock that is already up almost 20% from its October low.

Not financial advice

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What happened: On Nov 4 McDonald's reported Q3 adjusted EPS of $3.57, up 11% and above the $3.38 analysts expected. Global comparable sales rose 1.5% but U.S. comparable sales fell 0.2% as guest counts declined. Revenue rose 1% to $7.16B, a bit below estimates. It also raised the quarterly dividend 4% to $1.93. The stock jumped 6.5% that day.

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Why a put and not the stock: the stock has bounced almost 20% from its Oct 5 low of $229.20 and is still just under the 200-day at $281.46. Selling the $260 put pays me $405 per contract now and gives me a cost basis of $255.95 if it gives back part of the earnings move.

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The risk: U.S. traffic is still negative and Q3 revenue missed estimates. If the stock falls back toward the 50-day ($250.29) I would own 100 shares at $255.95 net. The trade expires before the next report, which Robinhood has as Feb 10 (tentative).

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What I'd watch: whether U.S. sales keep improving after the value push (management said they got better as the quarter went on), the Extra Value Meals relaunch and the specialty drinks rollout. This is a slow compounder and I am fine owning it lower.

Sources: McDonald's Q3 2026 release: adj. EPS $3.57 (+11%), global comps +1.5%, U.S. -0.2%, dividend +4% to $1.93 · CNBC: Q3 adj. EPS $3.57 vs $3.38 expected (LSEG), revenue $7.16B vs $7.29B, U.S. comps -0.2% · Quartz: Q3 beat as U.S. traffic fell, revenue +1% to $7.16B · Yahoo Finance: Q3 comps +1.5% vs 1.4% expected, U.S. visits down, new drinks push · McDonald's 10-Q for Q3 2026: diluted EPS $3.51, adj. $3.57, comps by segment · Robinhood: live MCD quote, daily closes, Jan 15 $260 put quote and greeks, Feb 10 earnings date (tentative)

Not financial advice. For informational and educational purposes only.