High Profit Trading Signals - A Blog To Share A High Profit Trading Signals And Insight About Forex, Stocks, Futures, Option Trading, ICO, BLOCKCHAIN And Bitcoin.Building the Perfect Master Plan

Thursday, June 22, 2017

Option Play On Nike ($NKE) NYSE

NKE Options Trading Idea

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. It offers products in nine categories, including running, NIKE basketball, the Jordan brand, football, mens training, womens training, action sports, sportswear, and golf.  The company offers performance and brand advertising services and has Earnings on 5.29.2017. The company’s stock is currently trading around $52.60 in a 52 week range of $49.01-$60.33. The stock has been shown on weak over the past year with shares down 4.73% over the past 12 months.  I think that the upside has more to come and NKE will pop hard on Earnings. To confirm this signal we will analyze the stocks historical movement record on earnings, the current expectations for movement being priced into the options market, the technical setup, and institutional order flow into the event.

NKE Earnings

First we will examine the stocks historical earnings performance record. We can see that over the past 8 quarters the stock has rallied 4 times on earnings day with an average move of 4.4%. This does not tell us that the stock is guaranteed to rally this quarter but it does show us that there is a slight bullish bias in the performance of NKE on earnings day. This means that as we work through the rest of our analysis will have a bullish bias.
With a sense of how the stock has moved on earnings day in the past we can calculate the expected movement for this quarter. To best isolate the expected movement in NKE we will use the shortest dated options that still contain the catalyst event. In this case we will use the June 30rd weekly expiry. To measure the market makers expected move we will need to calculate the price of the at the money straddle. We looked at the NKE $3.00 strike straddle in the June 30rd weekly expiry and it is implying a whopping $3.00 move.

NKE Straddle

The straddle is marking around $3.00. This implies an expected move of around $3.00. This implies a move of around 5.2% by Friday’s expiry. Since this is in line with the stocks historical movement record we know that there an opportunity to put on a good reward vs risk setup GOOGL.
Upside target = $52.60 + $3.00 = $52.60
Downside Target = $52.60 – $3.00 = $49.60
With these targets in mind we can look at the chart in NKE to see if trend agrees with the bullish bias in NKE price action.
Here we can see that the stock is trading below the Ichimoku Cloud, but I think it has found a short term bottom in the last week. One last indication also points to the possibility for a move to the upside in NKE.
I think that NKE will move higher on Earnings, but I want to make sure I am getting a favorable reward to risk setup.  I think the stock will move higher, but I am not sure how much

Potential trade: Buying NKE June 30rd $53.5-$55.5-$57.5 Call Butterfly for $.35 credit

Risk: $35 per 1 lot
Reward: $165 per 1 lot
Breakeven: $53.85 and $57.15

Our Credo: What's Good for YOU!..Good For Us and vice versa!...


Investing is Inherently Risky There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Hypothetical Results Are Reported Results and examples used in the Company’s advertisements, books, videos, websites, and other media—including on the Site and the Network—are, in some cases, based on hypothetical (simulated) trades. Plainly speaking, these trades were not actually executed. Hypothetical performance results have certain limitations. Unlike an actual performance record, hypothetical results do not represent actual trading. Also, since the trades have not been executed, the hypothetical results may have under-or-over compensation for the impact, if any, of certain market factors, such as lack of liquidity. Hypothetical trading programs generally are also subject to the fact that they are designed with the benefit of hindsight. Hypothetical results also do not account for commissions or slippage. The Company’s simulations assume purchase and sale prices believed to be attainable. Yet traders are going to be getting into trades at different times and using various exit approaches, which may result in different pricing and outcomes. You may or may not receive the best available price on the purchase or the sale of a position in actual trading. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Company’s software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.


Market Quotes are powered by Investing.com



Blog Archive

Follow by Email