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Stock impact report

How Can Investors Proceed When There Are No 'Cheap' Options? [Yahoo! Finance]

McDonald's Corporation (MCD) 
Last mcdonald's corporation earnings: 4/30 06:58 am Check Earnings Report
Company Research Source: Yahoo! Finance
The war in Iran is causing uncertainty in the markets, which has led to a general increase in the price of options. There are hardly any stocks whose options are cheap right now, relative to the past year. In the article below, I'm examining the data to see if this could lead to headwinds for options traders going forward. What Are “Cheap” and “Expensive” Options? There are a few ways to define cheap and expensive when it comes to option prices. For example, a week ago, McDonald's (MCD) one-week at-the-money (ATM) call had a 21% implied volatility (IV), compared to about 45% for Tesla (TSLA). On an absolute basis, MCD options were much cheaper than TSLA. But relative to itself over the past year, MCD was actually more expensive. Its IV was higher than about 85% of the past year's readings, while TSLA's IVs ranked higher than 40% of its own readings over the past year. MCD has lower IV's naturally because its earnings are more predictable than TSLA. Compared to itself over the pas Show less Read more
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