YUM Brands (YUM) came out with earnings this morning that beat the street. While this is no surprise, the stock has responded negatively, down 2.66 percent at the open as investors digest the conference call.
Despite today’s selling, the numbers looked good which leads us to believe sideways trading will occur over the next few weeks and buyers and sellers battle for direction.
An August Iron Condor makes sense here as there is a good credit to be earned while still keeping the breakeven levels 10 percent on each side. We can also benefit as Implied Volatility is sucked out of the stock over time.
SOLD
-31 IRON CONDOR YUM 100 AUG 10 44/45/36/35 CALL/PUT @.20 LMT
This trade also has a slightly bearish bias as we still feel the 1,090-1,100 area will prove to be strong resistance for the broader market over the next few weeks.
