Mike Khouw shared with the viewers of CNBC's "Options Action" his bearish options strategy in Nike Inc NKE.
The company is going to report earnings on June 29 and Khouw wants to sell a call spread, to make money if the stock trades lower, stays at its current price or even if it trades slightly higher. He wants to sell the July 53.50 call for $1.15 and buy the July 54.50 call for 80 cents. With the trade, he is going to collect a net premium of 35 cents, if the stock stays below $53.50 at the July expiration. The trade starts to lose money above $53.85 and it can maximally lose 65 cents.
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