When McDonald’s (MCD) shares were near $100 back in July, my homework was showing a possible test to $90-$85 for McDonald’s at some point this year. There were bullish calls at the time for shares to push $110, but I certainly didn’t see it that way.

MCD shares tested a low of $90.53 in mid-Sept. and rebounded to $95 at the start of Oct. Great — I had the perfect back-test in place, and I traded the MCD Nov. 90 puts at 90 cents with the stock just north of $94.

A week later, MCD stock broke below $93 but bounced back to test $94. The whipsaw action resulted in a slight single-digit profit, as the market makers pounced on my Stop Limit.

McDonald’s will report earnings next Tuesday, and analysts are expecting $1.38 a share on revenue of $7.2 billion. However, the range is what really matters, as there is a chance for an earnings miss or beat.

The low estimate from the 28 suit-and-ties that follow McDonald’s has MCD stock earning $1.31 a share for a 7-cent miss. The high estimate has McDonald’s earning $1.51 a share for a 13-cent beat.

There was talk of a “large investor stake” in McDonald’s at the end of September that gave shares a bid, but I’m in the camp that they will miss Wall Street’s estimates next week.

McDonald’s is trying to transform itself into a “cooler” restaurant theme, but its menu needs an overhaul, as well as the quality of food it’s serving. With today’s healthy living lifestyle, McDonald’s falls well short in that category, as there are still a number of gut busters on its menu.

If MCD shares get back above $92, I may take advantage of that and to play the MCD Nov. 87.50 puts.

The risk to this trade is that McDonald’s could report better-than-expected earnings and up its outlook. Tuesday’s pop in the stock can be attributed to McDonald’s and American Express (AXP) hooking up to let customers use their “reward points” from the financial giant to purchase meals. While this could help sales at the struggling burger giant, I believe more bad news than good is coming.

I have also talked about using straddle and strangle option trades in the current trading environment, and conservative traders could look at adding the MCD Nov. 95 calls to protect against an upside surprise.

The goal of these types of option trades is to have the call or put option offset the cost of one to pay for the other. The goal is to make a double-digit profit, but strangle option trades require a much larger move in the stock to make these trades work.

For those looking to take a straight-up directional trade, I would rather roll with the MCD Nov. 87.50 puts.

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