McDonald’s – Sold PUT Options

Today, 09/30/26, the Value Investment Fund sold two contracts (200 shares) of PUT Options on McDonald’s. The current market price for McDonald’s is $234 per share. The Facilitator of the Value Investment Fund has determined that the intrinsic value for McDonald’s is in the $235 to $245 per share range. McDonald’s is one of the top 10 companies in the world with outstanding cash flow and a business model second to none. Simply put, McDonald’s is a solid company, and at this price, a value investor needs to take advantage. Look at the historical market price graph for McDonald’s:

McDonald’s market price peaked at $341 a share in late February of 2026. The current price is 32% lower than the historical peak price. There have been only a handful of times that this has happened during the lifetime of McDonald’s. The market price always recovered within 18 months and went on to higher historical levels. In effect, high quality companies always rebound with market price in a very short window of time. A value investor should always take advantage of this basic knowledge. Therefore, the Value Investment Fund is conducting two distinct trades.

First, the Fund is purchasing a second tranche of shares, i.e. 100 shares at $232 for a total of $23,300 including a $1 per share transaction fee.  The Fund utilized $20,000 from its Margin Account to make this purchase. The Fund paid a $400 fee (2% purchase fee) and is paying a 1% interest fee at month’s end for using the Margin Account.

Secondly, the Fund is selling 200 PUT Options with a strike price of $300 and strike date of January 19, 2029 (two years and three months out). The current PUT Options chain as the BID price at $71.70 per share. The Value Investment Fund must pay a $1/Share transaction fee netting $70.70 per share. Total cash received was $14,140. See the below PUT Options chain for the strike date of 01/19/2029:

The Facilitator believes that the market price will recover within 18 months and go above $300 per share. Furthermore, the Facilitator is taking advantage of the intrinsic value against the market value.  At $300 per share less the $70 per share PUT Option price, the actual price to pay for this stock if it is exercised is $230 which is below intrinsic value.

From the White Paper written on McDonald’s back in 2021, McDonald’s intrinsic value in growing at about $2 to $2.50 per quarter. Thus, over the next nine quarters, McDonald’s intrinsic value will grow from the current estimated $235 value to about about $257. The $230 effective cost for McDonald’s will be a 10% discount against the future intrinsic value. This is a quality purchase. Act on Knowledge.