Hey Trader,

I remember way back when Burger King used to say, “Have it your way…”  – it was very catchy.

Now Restaurant Brands International (Ticker: QSR) has Tim Hortons and Popeye’s Fried Chicken. My wife makes a mean and tasty rendition of Popeye’s Red Beans and Rice and oven-fried chicken.

Now that I have made you sufficiently hungry, it’s time to dig into some volatility in QSR.

QSR is like a lot of stocks this year. Besides the Magnificent 7, stocks like QSR are nearer the bottom of their ranges than the top of the ranges. Just recently, many of the IVs started to jump.

I have some thoughts about this.

Here’s my full vol analysis…

IV is Jumping as Traders Buy Calls

Why does IV rise? Generally, it’s when traders think stocks can go in two directions, up or down.  Right now QSR is trading at lows of the year with slightly higher IVs. Although it’s not dead lows.  

A better trade here would be a diagonal call spread, which is known as a synthetic covered call or SCC. Buy a back-month ITM call and sell a near-term call just at the money call. That way, the trade sells some of the pricier implied volatility. Just make sure the takeout price on the rally is still green.

The good news is that we will cover this idea on Monday during our weekly Ticker Highlight Show – where we cover the previous week’s Pit Report stock and give out a trade.

However, it’s only available to our paid members. So check out our services if you want this exclusive trade.

To Your Trading Success,

AG