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Mike Khouw's Nike Options Trade

Mike Khouw's Nike Options Trade

On CNBC's "Options Action," Mike Khouw spoke about an options trading idea in Nike Inc (NYSE: NKE). The company is going to report earnings on Tuesday and Khouw wants to use elevated implied volatility for the event to put on a put calendar.

He said the stock is reaching a very tough price level as it is trading close to its all-time highs. Additionally, it's very close to its peak valuation, with price to earnings just under 34.

See Also: Dan Nathan's Amazon Options Trade

Khouw wants to sell the Sept. $87.50 put for $2.10 and buy the October $87.50 put for $2.55. The trade would cost him 45 cents.

He expects the earnings report is going to be a non-event and the stock would stay at current levels. If the short put expires worthless his long put would cost him 45 cents and the trade would be profitable below $87.05.


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