I am going to explain a conservative strategy to be applied in McDonalds (MDC), taking advantage of good Earning results.
MCD had Earnings showing very good results (EPS $1.15 vs Wall Street view of $1.11). This company belongs to Services sector (Restaurants). It has a Dividendof 3.6%
Intrinsic Value: $70
Next Earnings: Jan
52w range: 50.44-64.46
My expectancy is that in the short term the stock moves in the lateral range between 57 and 60.
Covered Call: Long Stock $59.68 + STO SC DIC 60 ($1.10)
CB = $58.58
There is a Dividend in December ($0.50), that would reduce more our CB and increase our profit.
Primary Exit (Bullish, price over 60): if price reach December expiration and it is over $60, we are assigned and get max profit ($1.92 = 3.22% ROI in 55 days)
Secondary Exit (Bearish, price breaks 57): we adjust position to a Collar trade.
Disclaimer: this strategy is only for educational purposes. It must not be considered as recommendation.