Options bulls are chiming in today
BofA Securities upgraded Nike Inc (NYSE:NKE) stock to "buy" from "neutral" this morning, hiking its price target to $113 from $110. The shares were last seen up 2.5% to trade at $91.19, as they work to rebound from their lowest levels since September. Pressure from the 20-day moving average appears to be keeping today's gains in check, however, and a ceiling may be forming at the $92 level.
Despite NKE's 15.9% year-to-date deficit, options bulls are also chiming in. So far today, 21,000 calls have already crossed the tape, which is double the intraday average volume. Most popular is the weekly 4/12 93-strike call, where new positions are currently opening.
At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE's 10-day call/put volume ratio of 2.42 sits higher than 95% of readings from the past 12 months. This means traders have been much more bullish than usual in the last two weeks.
These options traders are in luck, as NKE premium is reasonably priced at the moment. This is per its Schaeffer's Volatility Index (SVI) of 22%, which sits in the 15th percentile of its annual range. Plus, its Schaeffer's Volatility Scorecard (SVS) stands at a high 85 out of 100, indicating Nike stock exceeded option traders' volatility expectations in the past 12 months.