NKE Analysis

Nike Inc. (sym)

Update 7/3/2017: NKE closed up $5 from the day before after earnings were published and remained high in that range the day after. I exited for a loss during expiration week.

Shares rose 10% over four days, or a +911% annual rate. The options position produced a 46.0% loss on debit for a -4,201% annual rate.

NKE publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days hence, on July 7.

Implied volatility stands at 29%, which is 2.2 times the VIX, a measure of the volatility of the S&P 500 index.

NKE’s IV stands in the 63rd percentile of its annual range and at the peak of its most recent broad movement.

The price used for analysis was $53.12.

Premium: $2.52 Expire OTM  
NKE-iron fly Strike Odds Delta
Long 58.00 91.6% 9
Break-even 55.52
Short 53.00 48.7% 54
Short 53.00 51.5% 46
Break-even 50.52
Long 48.00 92.8% 6

The premium is 50% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered an order on NKE as described above. The stock at the time of entry was priced at $53.23.

By Tim Bovee, Portland, Oregon, June 29, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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