Nike Stock Slips Ahead of Q1 Earnings Report

Calls have ruled the roost lately, but puts are picking up today

Deputy Editor
Sep 21, 2020 at 1:56 PM
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The shares of Nike Inc (NYSE: NKE) are down 1.2% to trade at $113.23 at last check, just one day ahead of Nike's first-quarter earnings report, which is due after the close on Tuesday, Sept. 22. Below, we will take a look at how the equity has performed on the charts as of late, and explore some of the options activity surrounding Nike stock ahead of the event. 

Nike stock has carved out a channel of higher highs since its three-year mid-March low of $60, culminating in an all-time high of $120.48 on Sept.15. Despite this, the equity has pulled back below the $114 for the first time since Sept. 9; however, NKE's 40-day moving average is firmly in place to catch any subsequent stumbles. Longer term, NKE sports a 30.7% year-over-year lead. 

NKE Chart September 21

In the options pits, calls rule the roost, as is evidenced by Nike stock's 50-day call/put volume ratio of 2.25 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). That ratio stands higher than 85% of readings from the past year, implying a ravenous appetite for long calls of late.

As of today, 23,000 calls and 6,760 puts have exchanged hands-- 1.7 times what is normally seen at this point and volume pacing in the 90th percentile from the past 12 months. Most popular is the November 110 put, followed by the 110 call from the same series close on its heels, with new positions being opened at both.

A look at NKE's history of post-earnings reactions during the past two years shows a mixed response. During its last eight reports, it's next-day sessions have been evenly split, including a 9.2% move higher on March 25, followed by a 7.6% slip in late June Overall, the security averages a post-earnings swing of 4.7%, regardless of direction and this time around the options market is pricing in a much higher move of 9.3%. 

 

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