MCD $137M Broken Wing Butterfly - Institutional Volatility Play Post-E. coli Crisis!

📅 November 28, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just deployed a sophisticated $137 MILLION multi-leg options strategy on McDonald's at 12:55 PM today! This complex broken wing butterfly involves buying $61M of $230 calls while selling $38M of $255 calls and $28M of $260 calls, with a small $280 call buy completing the structure. With MCD trading at $311.82 and still recovering from October's E. coli outbreak that tanked U.S. sales 1.4%, this institutional-sized position appears designed to profit from controlled volatility as the company deploys its $100M recovery investment and launches the McValue platform in January 2025.

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📊 Company Overview

McDonald's Corporation (MCD) is the world's largest restaurant owner-operator with a global footprint spanning over 43,000 locations:
- Market Cap: $222.5 billion
- Industry: Retail eating places (restaurants/quick service)
- Current Price: $311.82 (November 28, 2025)
- Primary Business: McDonald's generates approximately 60% of revenue from franchise fees and lease arrangements, with 2024 system sales reaching $131 billion across its global network of restaurants serving burgers, fries, breakfast items, beverages, and other fast food offerings.

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💰 The Option Flow Breakdown

The Tape (November 28, 2025 @ 12:55:16):

Time	Symbol	Side	Type	Expiration	Premium	Strike	Volume	OI	Size	Spot	Option Price	Option Symbol
12:55:16	MCD	BUY	CALL	2025-12-19	$61M	$230	14,000	794	7,490	$311.82	$82.02	MCD20251219C230
12:55:16	MCD	SELL	CALL	2025-12-19	$38M	$255	14,000	838	6,880	$311.82	$55.55	MCD20251219C255
12:55:16	MCD	SELL	CALL	2025-12-19	$28M	$260	12,000	608	5,620	$311.82	$50.35	MCD20251219C260
12:55:16	MCD	BUY	CALL	2025-12-19	$8.8M	$280	4,200	237	2,680	$311.82	$32.65	MCD20251219C280

🤓 What This Actually Means

This is a broken wing butterfly spread - one of the most sophisticated institutional strategies you'll see! Here's what's happening:

• 💸 Total capital deployed: $137M across all four legs
• 🎯 Deep ITM long position: $230 strike calls with MCD at $311.82 = $81.82 intrinsic value
• 🔒 Short spread overhead: Sold $255 and $260 calls to finance part of the position
• ⚡ Tail protection: Small $280 call buy caps upside risk
• ⏰ December 19 expiration: 21 days to expiration (monthly OPEX)
• 📊 Volume vs OI: Massive volume spike relative to existing open interest signals new position
• 🏦 Institutional fingerprint: Complex multi-leg structure executed simultaneously at exact same timestamp

What's really happening here:
This trader is making a calculated bet on MCD's recovery trajectory from the October 2024 E. coli outbreak. By buying deep in-the-money $230 calls and selling out-of-the-money calls at $255-$260, they're positioning for controlled upside movement while reducing cost basis through premium collection. The structure profits most if MCD trades in the $255-$260 range at December expiration, capturing the stock's recovery without requiring a massive breakout.

The strategy's sweet spot: Maximum profit occurs if MCD consolidates between $255-$260 by December 19th - about 2-5% downside from current levels. This aligns perfectly with the company's expected trajectory: recovering from the E. coli crisis that drove U.S. same-store sales down 1.4% in Q4 2024, but not yet firing on all cylinders until Q2 2025 when full recovery is projected.

Unusual Score: 🔥 EXTREME - The $230 call leg alone shows Z-Score of 47.93 (extremely unusual), while the $255 calls registered an astronomical 18,328x average activity. This represents institutional-scale positioning comparable to major hedge fund allocations. Based on the premium size relative to typical MCD options activity, this occurs perhaps a few times per year - definitely not your typical retail flow.

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📈 Technical Setup / Chart Check-Up

YTD Performance Chart

McDonald's is up +6.60% YTD with current price at $311.82, starting the year at $292.51. The chart reveals a tale of resilience - after peaking above $320 in early 2025, MCD experienced significant volatility through the E. coli outbreak period in October, then rebounded strongly to current levels near the highs.

Key observations:
- 📈 Steady recovery pattern: After the October outbreak dip, stock has regained most losses
- 💹 Trading near range highs: Current $311.82 sits in the upper third of YTD range
- 🎢 Volume patterns: Notice elevated volume spikes during the crisis and recovery phases
- 📊 Consolidation zone: Stock has largely traded in $295-$315 range post-outbreak

Gamma-Based Support & Resistance Analysis

Current Price: $311.82

The gamma exposure map reveals critical price magnets and barriers around current levels over the next 10 days:

🔵 Support Levels (Put Gamma Below Price):
- $310 - Strongest nearby support with 12.1B total gamma exposure (net +7.88B bullish)
- $305 - Secondary support at 4.43B gamma
- $300 - Major floor with 5.04B gamma (dealers will buy dips here)
- $295 - Deep support at 2.15B gamma
- $290 - Extreme support zone with 2.97B gamma

🟠 Resistance Levels (Call Gamma Above Price):
- $312.50 - Immediate ceiling with 13.5B total gamma (strongest level nearby!)
- $315 - Secondary resistance at 12.2B gamma
- $320 - Major resistance zone with 14.8B gamma (massive wall)
- $325 - Extended resistance at 4.50B gamma
- $330 - Upper bound resistance with 2.17B gamma

What this means for traders:
MCD is trading right at a critical inflection point between $310 support and $312.50 resistance. The gamma data shows dealers holding massive positions at $320 (14.8B) which will create natural selling pressure as price approaches that level. Meanwhile, the strong support cluster at $305-$310 means market makers will step in to buy dips, creating a floor. This setup suggests MCD could trade range-bound between $305-$320 through December expiration unless a major catalyst emerges.

Net GEX Bias: Bullish (65.77B call gamma vs 19.48B put gamma) - Overall positioning leans heavily bullish, but immediate resistance overhead at $312.50-$320 could cap near-term upside.

Implied Move Analysis

Options market pricing for upcoming expirations:

• 📅 Weekly (Dec 5 - 7 days): ±$4.70 (±1.50%) → Range: $306.78 - $316.55
• 📅 Monthly OPEX (Dec 19 - 21 days): ±$8.41 (±2.69%) → Range: $301.75 - $319.84
• 📅 Quarterly Triple Witch (Dec 19 - 21 days): ±$8.41 (±2.69%) → Range: $301.75 - $319.84
• 📅 Yearly LEAPS (Dec 2026 - 385 days): ±$42.33 (±13.54%) → Range: $254.42 - $350.79

Translation for regular folks:
Options traders are pricing in a modest 1.5% move ($5) by next week and a 2.7% move ($8) through December expiration. That's relatively low volatility for a stock recovering from a major food safety crisis! The market seems to be expecting stable, controlled recovery rather than explosive moves.

The December 19th expiration (when this butterfly trade expires) has an upper range of $319.84 - meaning the market thinks there's limited probability MCD breaks $320 by then. This aligns perfectly with the gamma resistance we're seeing at $320 and the butterfly's profit zone of $255-$260 (which would imply some downward drift from current $311.82).

Reality check: The 2.69% implied move for the monthly expiration is quite tame considering MCD is still navigating recovery from the E. coli outbreak with full recovery not expected until Q2 2025. This suggests the market has already priced in the recovery narrative and isn't expecting major surprises in the next 3 weeks.

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🎪 Catalysts

📅 Already Happened (Historical Context)

E. coli Outbreak Crisis - October 2024 ☣️

The event that set the stage for this trade: 104 E. coli O157:H7 cases across 14 states linked to slivered onions on Quarter Pounders, occurring from September 12 - October 21, 2024. The outbreak resulted in 34 hospitalizations, 4 hemolytic uremic syndrome cases, and 1 death in Colorado. Taylor Farms voluntarily recalled yellow onions on October 22, 2024, and the CDC/FDA declared the outbreak over in December 2024.

Impact: Traffic dropped 9.5% nationwide and 32% in Colorado at the peak. McDonald's responded with a $100 million recovery investment ($65M franchisee support, $35M marketing).

Q4 2024 Earnings - February 10, 2025 📊

Results revealed the full impact: Revenue $6.39B vs $6.44B expected (miss), but adjusted EPS $2.83 met consensus. Critical metric: U.S. same-store sales fell 1.4% (vs -0.6% expected), marking a reversal from prior year's +4.3%. However, global same-store sales +0.4% beat expectations of -1.0%, showing international strength offsetting domestic weakness.

Management guided that sales bottomed in November 2024 and recovery not expected until Q2 2025 - putting full recovery timeline at roughly March-June 2025.

Q3 2024 Results - October 29, 2024:

Before the crisis hit: Revenue $6.87B up 3% YoY, beating consensus $6.796B. Adjusted EPS $3.23 vs $3.18 consensus (beat by $0.05). U.S. comparable sales +0.3% showed reversal from prior quarter decline. The company also declared a 6% quarterly dividend increase to $1.77 per share ($7.08 annually), marking 48th consecutive year of dividend growth.

China Expansion Acceleration - November 2024 🇨🇳

McDonald's acquired Carlyle's minority stake for $1.8B, increasing ownership from 20% to 48%, with CITIC Consortium retaining 52% majority ownership. This strategic move strengthened control ahead of aggressive expansion plans.

🔥 Upcoming Catalysts (Next 6 Months)

McValue Platform Launch - January 7, 2025 (6 WEEKS!) 🎯

McDonald's launching nationwide value menu with $5 Meal Deal extended through summer. This is the company's answer to consumer affordability pressures and key to driving traffic recovery.

Revenue potential: Estimated to drive 3-5% traffic increase in Q1-Q2 2025. This catalyst directly impacts the butterfly trade's profit zone - if McValue successfully drives traffic without the stock exploding higher, MCD stays in the $255-$260 sweet spot.

McCrispy Strips Nationwide Rollout - May 5, 2025 🍗

First permanent menu addition since 2021 featuring 100% white meat chicken with bold black pepper flavor and Creamy Chili Dip. Menu innovation critical to maintaining competitive edge and driving check sizes higher.

China Expansion - 1,000 New Restaurants in 2025 🇨🇳

McDonald's planning 1,000 new China locations in 2025 (out of 2,200 global openings) with target of 10,000+ locations by 2027 from current ~7,000 stores. China performance in Q1 2025 was stable, driven by delivery growth, value meals, and chicken performance.

Google Cloud AI Partnership Implementation (2024-2026) 🤖

Multi-year global partnership deploying edge computing via Google Distributed Cloud across thousands of restaurants. Applications include:
- Generative AI for 150 million loyalty program members
- AI-powered predictive maintenance for fryers and McFlurry machines
- Dedicated Google Cloud team at Chicago Speedee Labs innovation center

Revenue impact: Estimated $200-300M annual cost savings from operational efficiency by 2026. This is a longer-term margin expansion story that supports higher valuations.

Q1 2025 Earnings - May 1, 2025 📊

Already reported: Revenue $5.96B (miss vs $6.09-6.15B consensus), adjusted EPS $2.67 (slight miss). Stock reacted with -1.35% post-announcement. The miss confirms management's guidance that recovery is slow and steady, not explosive - exactly the scenario where this butterfly profits.

⚠️ Risk Catalysts (Headwinds)

Consumer Affordability Crisis 💸

CEO warned "broad-based consumer pressures persist" with consumers "more discriminating with every dollar". Average meal prices up 9% since 2022 driving traffic declines from low-income consumers. The McValue platform is designed to address this, but success is uncertain.

California Minimum Wage Impact & Labor Inflation 💰

$20/hour California minimum wage law (April 2024) driving "high single-digit labor inflation" nationwide from "bleed-over" effect. Mid-to-high single-digit price increases necessary to offset labor/commodity costs, creating tension with affordability narrative.

Regulatory Pressures - UK Antitrust Ruling ⚖️

UK Competition Appeal Tribunal ruled Apple abused dominant position, potential damages up to £1.5B ($2B) over App Store commissions. While this is about Apple, similar antitrust pressure could extend to McDonald's pricing power and franchise arrangements in various markets.

CosMc's Failure - Strategic Misstep ❌

$50+ million estimated investment write-off from failed spin-off concept, with closure announced May 2025 after 5-month pilot. While relatively small, it signals execution risk on innovation initiatives.

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🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and catalyst timeline, here are the scenarios for this December 19 butterfly position:

📈 Bull Case (25% probability)

Target: $320-$330

How we get there:
- 💪 McValue platform exceeds expectations driving 5%+ traffic increase in early December data
- 🇨🇳 China expansion announcements and positive momentum in international markets
- 🤖 Positive Google Cloud AI partnership announcements showing early ROI
- 📊 Management raises Q1 2026 guidance citing recovery acceleration
- ✅ Breakthrough gamma resistance at $312.50-$320 on sustained buying
- 🎄 Strong holiday season traffic and sales data

Impact on butterfly: NEGATIVE - If MCD rallies above $280, the position loses money on the uncapped short call exposure at $255-$260. The $280 long call provides some protection but max loss increases as stock rises further. This is the worst-case scenario for this trade structure.

Key risk to bull case: Stock already up 6.6% YTD and trading at 25.8-26.4x P/E (per catalysts document) - significant premium to peer group average of 19.27x. Limited margin for error at current valuation.

🎯 Base Case (60% probability)

Target: $295-$315 range

Most likely scenario:
- ✅ McValue platform launch drives modest traffic improvement (2-3%) but not explosive
- 📊 Slow, steady recovery from E. coli crisis continues as management guided
- 💰 Labor inflation and consumer pressures offset by value platform, margins stable
- 🇨🇳 China shows improvement but nothing spectacular
- 🔄 Trading between strong gamma support ($305-$310) and resistance ($312.50-$320)
- ⏰ Market waits for Q1 2025 data (after December expiration) to confirm recovery trajectory

Impact on butterfly: MODERATELY POSITIVE - If MCD drifts down to $300-$310 range by December 19, the position captures significant profit from the short $255-$260 calls losing value while long $230 calls retain intrinsic value. Not maximum profit but solid risk-adjusted return.

This is the trade's design: The structure profits from consolidation and modest downward drift. With recovery not expected until Q2 2025 and December expiration falling in that limbo period, this scenario has highest probability.

📉 Bear Case (15% probability)

Target: $280-$295

What could go wrong:
- 😰 McValue platform disappoints or cannibalizes margins more than expected
- 🦠 Additional food safety concerns or negative publicity around E. coli recovery
- 💸 Consumer spending deteriorates further; low-income customers cut visits
- 🇨🇳 China competition from Huawei-backed chains or macro slowdown impacts Asia growth
- 💰 Labor inflation accelerates faster than pricing power, squeezing margins
- 📉 Broader market selloff drags restaurant stocks lower
- ⚖️ Regulatory issues in international markets impact sentiment

Impact on butterfly: EXTREMELY POSITIVE - If MCD falls to $280-$295, this is near the maximum profit zone for the structure. The short $255-$260 calls expire worthless (full premium capture), the long $230 calls retain $50-65 of intrinsic value, and the $280 long calls gain value or expire worthless. This is actually the ideal scenario for this trade!

Maximum profit zone: $255-$260 at December 19 expiration. At those levels:
- Long $230 calls worth $25-30 intrinsic value each = ~$18-22M
- Short $255 calls expire worthless = keep full $38M premium
- Short $260 calls expire worthless = keep full $28M premium
- Long $280 calls expire worthless = lose $8.8M
- Net P&L: Significant profit from premium collection on short calls

Key support: Strong put gamma at $300-$305 should limit downside unless fundamentals deteriorate significantly. The 6% dividend increase to $1.77/share with 48 consecutive years of growth provides downside support from dividend investors.

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💡 Trading Ideas

🛡️ Conservative: Wait for McValue Data

Play: Stay on sidelines until post-January 7 McValue platform launch data

Why this works:
- ⏰ Major catalyst (McValue launch) occurs after this butterfly expires
- 💸 Complex structure requires sophisticated risk management
- 📊 Stock near YTD highs at $311.82 - better entry likely on consolidation
- 🎯 Wait for actual traffic data from McValue before committing capital
- 📉 Recovery timeline extends to Q2 2025 - no urgency to enter now

Action plan:
- 👀 Monitor January-February same-store sales data for McValue impact
- 🎯 Look for pullback to $300-$305 gamma support zone for stock entry
- ✅ Confirm McValue driving 3-5% traffic increase before buying shares
- 📊 Watch for Q1 2025 earnings (May 1) to confirm recovery trajectory
- 💰 Consider initiating position if stock pulls back 5-8% to $285-295 range

Risk level: Minimal (cash position) | Skill level: Beginner-friendly

⚖️ Balanced: Post-Expiration Call Spread

Play: After December 19 expiration, sell bull call spread on January or February expiration

Structure: Buy $315 calls, Sell $325 calls (January 16, 2026 expiration)

Why this works:
- 🎢 Captures upside from McValue platform launch without unlimited risk
- 📊 Defined risk spread ($10 wide = $1,000 max risk per spread)
- 🎯 Targets gamma resistance zone at $320-$325 where stock likely to consolidate
- ⏰ 49 days to expiration gives time for McValue data and traffic improvement to materialize
- 💡 Benefits from any positive surprise on recovery timeline

Estimated P&L:
- 💰 Estimated net debit: $4-5 per spread ($400-500 max risk)
- 📈 Max profit: $500-600 if MCD at/above $325 at January expiration
- 📉 Max loss: $400-500 if MCD below $315 (defined and limited)
- 🎯 Breakeven: ~$319-320
- ✨ Return potential: 100-125% if target hit

Entry timing: Wait until after December 19 expiration when this institutional butterfly clears out

Risk level: Moderate (defined risk) | Skill level: Intermediate

🚀 Aggressive: Short Iron Condor - High Risk Premium Collection

Play: Sell iron condor bracketing expected trading range

Structure:
- Sell $320 calls / Buy $325 calls
- Sell $300 puts / Buy $295 puts
(December 19, 2025 expiration - same as institutional butterfly)

Why this could work:
- 💸 Collect premium from range-bound trading environment
- 🎯 Strikes outside implied move range (±$8.41 = $303.41-$320.23)
- 🔄 Gamma support at $300-$310 and resistance at $320 align with short strikes
- ⚡ Recovery timeline to Q2 2025 suggests consolidation before next leg up
- 📊 Betting on "steady recovery" scenario already priced in
- 💰 Can collect $2-3 per iron condor ($200-300 credit)

Why this could blow up (SERIOUS RISKS):
- ⚠️ DEFINED BUT SIGNIFICANT RISK - Max loss $200-300 per condor (2-3x premium collected)
- 😱 McValue platform could surprise positively, driving stock above $320
- 🦠 Additional food safety concerns could tank stock below $300
- 💥 Broader market volatility could whipsaw MCD outside expected range
- 📉 You're fighting against massive institutional position (the butterfly) which suggests smart money expects movement
- 🎰 Assignment risk on short strikes if stock approaches those levels
- 💰 Margin requirements: Broker requires capital for max loss ($500-700 per condor)

Estimated P&L:
- 💰 Collect ~$2-3 per iron condor ($200-300 credit)
- 📈 Max profit: Keep all premium if $300 < MCD < $320 at Dec 19 expiration
- 📉 Max loss: $200-300 per condor if stock breaks below $295 or above $325
- 🎯 Probability of profit: ~65-70% based on implied move, but with unfavorable risk/reward
- ⚠️ Risk-reward ratio: ~1:1 (risking $200-300 to make $200-300)

Risk level: HIGH (defined but significant risk both sides) | Skill level: Advanced

⚠️ WARNING: DO NOT attempt this trade unless you:
- Have experience managing short options through product launches/catalysts
- Can handle assignment of 100 shares per contract ($30,000-32,000 per side)
- Understand you're betting against a $137M institutional position
- Can actively monitor and adjust position if stock approaches your strikes
- Recognize that major institutions often know something retail doesn't

Critical consideration: The fact that a sophisticated player deployed $137M in a butterfly structure suggests they expect some volatility or movement. Selling premium against that institutional position is like betting against the house - possible to win, but odds are unfavorable.

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⚠️ Risk Factors

Don't get caught by these potential landmines:

• 🦠 E. coli Recovery Timeline Uncertainty: While CDC declared outbreak over, full recovery not expected until Q2 2025. Any setback in traffic recovery or additional food safety incidents could extend timeline and pressure stock. Traffic was down 9.5% nationwide and 32% in Colorado at peak - complete recovery requires rebuilding consumer trust.

• 💸 Consumer Affordability Pressures Intensifying: CEO explicitly warned "consumers more discriminating with every dollar" with meal prices up 9% since 2022. McValue platform is the response, but if it fails to drive traffic or cannibalizes margins, stock vulnerable. Low-income consumers (core MCD demographic) reducing visit frequency.

• 💰 Labor Inflation Squeezing Margins: California's $20/hour minimum wage driving high single-digit labor inflation nationwide through "bleed-over effect." McDonald's must pass costs through pricing, but faces consumer resistance. Margin compression risk if pricing power deteriorates.

• 🇨🇳 China Execution Risk on Aggressive Expansion: 1,000 new restaurants planned in 2025 requires significant capex and execution. History shows aggressive expansion often leads to same-store sales decline from cannibalization. Q1 2025 China was merely stable, not accelerating.

• 🎰 Institutional Position Signals Expected Movement: Someone deployed $137M in a complex butterfly structure expiring December 19. This isn't a static bet - it's a sophisticated trade expecting controlled volatility. The structure profits most from downward drift to $255-260, suggesting the trader expects near-term weakness or consolidation. When institutions this size position, they often have information or insights retail doesn't.

• 📊 Valuation Premium Limits Margin of Safety: Trading at 25.8-26.4x P/E, representing 19.27 peer group average vs 25.80 MCD - a 34% premium to peers. Also 46% premium to Consumer Cyclical sector average (17.67). Elevated valuation requires perfect execution on McValue, China expansion, and recovery timeline. Limited cushion for disappointment.

• ⚖️ Regulatory Overhang in Multiple Markets: While UK antitrust case mentioned in catalysts pertains to Apple, McDonald's faces similar franchise and pricing scrutiny globally. China filed antitrust complaints over monopolistic control. Regulatory pressure could limit pricing power or force franchise model changes.

• 🎪 Catalyst Timing Mismatch: McValue platform launches January 7, but this butterfly expires December 19 - missing the actual data. The trade is positioning ahead of the catalyst, betting on consolidation/weakness before the launch rather than the post-launch impact. If market front-runs McValue optimism in early December, position could suffer.

• 💥 Gamma Pin Risk at $312.50-$320: With massive 13.5B-14.8B gamma at those strikes, dealers will actively hedge by selling into rallies and buying dips. This creates artificial price ceiling and floor. However, if significant external catalyst emerges (major acquisition, unexpected earnings, macro event), gamma walls can break suddenly with explosive moves.

• 📉 Tariff and Trade Risk: As global company with complex supply chain, McDonald's exposed to trade tensions and tariffs. Commodity costs (beef, potatoes, packaging) vulnerable to policy changes. Could pressure margins if unable to pass through costs.

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🎯 The Bottom Line

Real talk: Someone just put $137 MILLION to work in one of the most sophisticated options structures we track. This isn't a simple directional bet - it's a carefully engineered position designed to profit from controlled downward drift into the $255-260 range by December 19.

What this trade tells us:
- 🎯 Institutional player expects MCD to consolidate or weaken modestly from current $311.82 over next 3 weeks
- 💰 They're NOT betting on explosive McValue-driven rally (January 7 launch is after expiration)
- ⚖️ Structure captures premium from elevated volatility around E. coli recovery while limiting risk
- 📊 Maximum profit occurs if MCD trades $255-260 at expiration - roughly 15-18% below current levels
- 🧠 This is "sell strength" positioning at $311.82, near YTD highs, ahead of major catalyst

The broader market context:
McDonald's is in a unique transition phase - recovering from October 2024 E. coli outbreak that drove U.S. sales down 1.4%, deploying $100M recovery investment, launching McValue platform January 7, and managing high single-digit labor inflation while maintaining 48-year dividend growth streak.

If you own MCD:
- ✅ Consider this institutional positioning as signal to trim at current levels ($311.82)
- 📊 Strong gamma support at $305-$310 provides some cushion for remaining position
- ⏰ Recovery timeline extends to Q2 2025 - no immediate catalyst to drive breakout above $320
- 🎯 If McValue succeeds beyond expectations, re-enter on pullback to $295-300
- 🛡️ Set mental stop at $295 (major gamma support) to protect against downside acceleration

If you're watching from sidelines:
- ⏰ January 7, 2025 - McValue platform launch is the next major catalyst
- 🎯 Look for entry on pullback to $295-305 range (gamma support zone) with 5-8% discount from current
- 📈 Post-McValue traffic data in late January/early February will confirm recovery trajectory
- 🚀 Longer-term (6-12 months), China expansion (1,000 stores in 2025) and Google Cloud AI partnership ($200-300M cost savings by 2026) support higher valuations
- ⚠️ Current valuation at 25.8x P/E (34% premium to peers) requires perfect execution - low margin for error

If you're considering options strategies:
- 🎯 This butterfly structure is ADVANCED - don't try to replicate without deep understanding
- 🔄 Better risk-reward in selling bull call spreads post-expiration targeting $315-325 zone
- ⚠️ Avoid selling premium against this institutional position (they likely know something)
- 📊 Consider waiting for December 19 expiration to clear before establishing new positions
- 💡 Simpler directional plays may offer better risk-adjusted returns than complex structures

Mark your calendar - Key dates:
- 📅 December 19, 2025 - Monthly OPEX, this $137M butterfly expires
- 📅 January 7, 2025 - McValue platform nationwide launch (major traffic catalyst)
- 📅 February 2025 - First same-store sales data post-McValue launch
- 📅 May 1, 2025 - Q1 2025 earnings (already reported: revenue miss, EPS met)
- 📅 May 5, 2025 - McCrispy Strips nationwide rollout
- 📅 Q2 2025 (April-June) - Management's guided timeline for full E. coli recovery

Final verdict: This $137M institutional butterfly is a sophisticated "sell strength" signal at $311.82 near YTD highs. The trade structure profits from consolidation or modest weakness into the $255-260 range, suggesting smart money expects limited upside over the next 3 weeks before McValue launch. The recovery timeline extending to Q2 2025, combined with labor inflation pressures and consumer affordability concerns, creates a challenging near-term setup. Patient capital should wait for better entry points in the $295-305 range with confirmation that McValue is driving actual traffic improvement. The long-term story (China expansion, AI partnership, dividend growth) remains intact, but near-term risk/reward favors caution.

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The unusual score reflects this specific trade's size relative to recent history - it does not imply the trade will be profitable or that you should follow it. Complex multi-leg strategies like butterflies require sophisticated risk management and are suitable only for experienced traders. The institutional trader deploying this $137M position has risk management capabilities and information access that retail traders typically lack. Always do your own research and consider consulting a licensed financial advisor before trading.

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About McDonald's Corporation: McDonald's is the world's largest restaurant owner-operator with $222.5 billion market cap, generating approximately 60% of revenue from franchise fees and lease arrangements across more than 43,000 stores globally with 2024 system sales of $131 billion in the retail eating places industry.