Options Hot on New Apple Partner Nike Inc (NKE)

Nike Inc (NYSE:NKE) is partnering with Apple Inc. (NASDAQ:AAPL) on the Apple Watch, and NKE options volume is accelerated

by Andrea Kramer

Published on Sep 7, 2016 at 3:11 PM

Athletic apparel issue Nike Inc (NYSE:NKE) popped higher this afternoon, on news of a partnership with Apple Inc. (NASDAQ:AAPL). The duo are teaming up for the new Apple Watch, and NKE shares are up 0.6% at $57.74 -- a session high -- in response. What's more, NKE options are trading at a faster-than-usual clip, as speculators roll the dice on the stock's short-term trajectory.

NKE put options are crossing the tape at twice the average intraday pace, though much of that volume is attributable to action that transpired ahead of the AAPL announcement. Specifically, it looks like traders this morning bought to open October 55 puts, which will move into the money if NKE breaches $55 before options expiration on Friday, Oct. 20 -- which encompasses Nike's next earnings release on Sept. 27.

Since the AAPL announcement, the stock's weekly 9/9 58-strike calls have grown popular, with more than 2,400 contracts traded on open interest of fewer than 221. Buyers of the calls expect NKE to extend today's uptrend and topple $58 before the close on Friday, when the weekly contracts expire.

More broadly speaking, call buying has been a popular strategy in NKE's options pits of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE has racked up a 10-day call/put volume ratio of 1.65 -- higher than 74% of all other readings from the past year. In other words, options buyers have initiated bullish bets over bearish at a faster-than-usual rate during the past two weeks.

Nike Inc (NYSE:NKE) has rebounded 12.2% off its late-June low of $51.47, but is now staring up at its 50-week moving average. This trendline helped usher NKE to a record high in late December, but could now translate into a speed bump. However, if history is any indicator, NKE will extend its third-quarter run higher.


Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Next Big Player in U.S. MJ Boom
Most pure-play marijuana stocks in the U.S. trade on the Over-the-Counter stock exchange.
Planet Fitness Stock Lifted Amid Re-Opening Optimism
Planet Fitness reopened around 800 facilities in North America
Coffee Stock Drops Despite Cost-Cutting Initiatives
Starbucks asked employees to further limit working hours or take unpaid leave
The Big Bankruptcy You Should Be Afraid Of
Porter Stansberry is making a concerning prediction.