Nike traders bet the athleisure stock will climb 8% in the next month $NKE (via OptionsAction)
by about 2 to 1," and total options volume was three times the average, Khouw said, adding that the October $95 calls were the most active trades.
"Over 12,000 of those traded for an average price of about 40 cents," the strategist said. "Normally, when we see this kind of activity, we're seeing buyers of those calls, and those would be bets that the stock is going to race through that strike by at least the premium they paid. But in this case, they actually were sellers, and I'm guessing that they were doing that against long stock positions.
That means Nike, which was trading near $88 early in Tuesday's session, could run to $95 by October's end, according to some traders. Nike reached its 52-week high of $90 in April." and director of advisor advocacy at Private Advisor Group, he'd rather wait and see how the Tuesday evening earnings report plays out.
"[The] $90 [level] has been a top a few times, so the strike price Mike talks about, the 5% move, squares you right up with 90 bucks," he said. "I'm inclined to rather buy it on a breakout above 90 than to try to play stock market ahead of a quarter in which they could say just about anything, especially with 26 times forward earnings. So, I would wait and see what they say.
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