Tony Zhang's Nike Trade

Tony Zhang spoke on CNBC's "Options Action" about Nike Inc NKE.

He is looking to sell the stock because he expects it to trade lower, along with the consumer discretionary sector. Nike retraced 50% of the initial sell-off and it bounced lower off the $87 resistance level. Zhang thinks it could test $60 to $70 range again.

See Also: Here's How Much Investing $100 In Nike Stock Back In 2010 Would Be Worth Today

To make a bearish trade, he wants to buy the $80/$62.50 put spread for $5. The break even for the trade is at $75 or around 5% below the closing price on Friday.

The trade can maximally make a profit of $12.50, if the stock drops to $62.50 or lower.