Nike Inc (NKE) Options Traders Wager On Another Thanksgiving Week Win

Nike Inc (NKE) has historically outperformed during the week of Thanksgiving

Nov 17, 2016 at 2:07 PM
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Nike Inc (NYSE:NKE) is one of the top stocks on the Dow this afternoon, up 1.7% at $51.53. Perhaps this -- along with NKE's historically strong Thanksgiving week performances -- explains why the athletic apparel stock's call options are changing hands at more than double the usual intraday rate.

The most active Nike option this afternoon is the weekly 12/2 51.50-strike call, with volume nearly doubling the second-most-active strike. Based on data from Trade-Alert, it appears at least some options are being bought to open. In other words, the expectation is for the shares to continue their recent run higher through the close on Friday, Dec. 2, when the weekly series expires.

Bullish options betting has picked up more generally, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE has amassed a 10-day call/put volume ratio of 1.78. Notably, this top-heavy ratio ranks in the bullishly skewed 72nd annual percentile.

As alluded to, this optimism may make sense in light of the stock's historical Thanksgiving week outperformance. Over the last decade, NKE has finished the holiday-shortened week higher 90% of the time -- one of only six S&P 500 Index (SPX) stocks to do so. Drilling deeper, the shares have posted an average return of 2.2% during those weeks, hinting at potential for extended upside in the not-too-distant future.

Technically speaking, Nike Inc (NYSE:NKE) shareholders would certainly appreciate it if history repeated itself. While the stock has been hot in November, adding close to 3%, the longer-term story is far different. Since the beginning of 2016, NKE stock has dropped over 17% of its value, making it the worst Dow stock to own by far.

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