The Beaverton, Oregon-based firm goes to report earnings Tuesday and it normally strikes round 4.7% on the occasion. The choices market is at the moment implying a transfer of seven% in both path.
Khouw thinks Nike’s valuation is excessive and the choice premiums are elevated. He believes it might be a good suggestion to promote name choices in opposition to the lengthy inventory place, going into earnings. Specifically, he would promote the October $120 name for $3.60. Choosing this strike, he has round $5 of potential upside and on prime of that he will get $3.60 in premium.
Those who do not personal the inventory, mustn’t promote bare calls, stated Khouw. Instead, they need to promote the October $120 name and purchase the October $125 for a credit score of $1.60. The premium is round a 3rd of the space between strikes.
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