Nike Inc (NKE) Bulls Eye a Round-Number Rally

Nike Inc's (NYSE:NKE) April 60 call is seeing buy-to-open activity today

by Karee Venema

Published on Mar 7, 2016 at 3:10 PM
Updated on Jun 24, 2020 at 10:16 AM

Call players are piling into Nike Inc's (NYSE:NKE) options pits this afternoon, with volume running at two times the average intraday rate. By the numbers, roughly 20,000 calls have changed hands, compared to around 8,200 puts.

Diving deeper, NKE's April 60 call has seen the most action, where it appears new positions are being purchased -- a theory echoed by Trade-Alert. If this is the case, the goal is for the stock to rally north of the round-number $60 mark by expiration at the close on Friday, April 15.

Expanding the sentiment scope reveals options traders have taken a much more skeptical stance toward NKE in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio of 1.00 sits higher than 84% of all comparable readings taken in the past year.

In the front-month series of options, peak put open interest of 4,007 contracts is found at the March 50 strike. According to the ISE, CBOE, and PHLX, a number of these positions have been bought to open since late January. Given the deep out-of-the-money status of the puts, though, it's possible that shareholders are using the options to protect paper profits.

In fact, year-over-year, Nike Inc (NYSE:NKE) has rallied an impressive 21.2% -- more than any other Dow component. More recently, the shares have pulled back since hitting a record high of $68.20 in late December to trade at $59.07, but are testing support atop their 200-day moving average.

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