This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

NKE: Let's Go for a Quick Run

Stocks in this article: NKE UA LULU

This complimentary article from Options Profits was originally published on January 26. Don't risk missing over 40 options trade ideas every week and exclusive commentary from over 10 experts. Click here for more information and a 14-Day Free Trial.

With the NBA moving into full swing it's hard not to think about one thing...athletic shoes. It's impossible to think about athletic gear without thinking about Nike (NKE).

However, NKE does have a few problems facing growth. Products from Under Armor (UA) and Lululemon (LULU) are taking some of the specialized market in clothing and while Reebok is certainly not what it used to be (have you pumped your shoe lately), it still remains a competitor. Also, companies like Puma and New Balance continue to innovate.

That said, society is beginning to loosen up and move away from dress to casual, and in many ways casual to athletic gear. On top of that we are all being pressed to work out more, and push toward healthier life styles. Finally, there are personalities wearing these clothes and shoes that are well known (we had a period of time where all there was to sell shoes was Kobe).

Looking at the stock itself, it is sitting at a 104-week high and the stock appears to be headed even higher. Moving on to the options, the stock has implied vols near a 104-week lows. 104-week high stock price, plus 104-week IV low price puts us in a perfect spot to buy premium.

Let's take a look at the chart with Jill and Scott before getting into the options trade:



For the really bullish, a naked call makes a lot of sense here. Personally, I love expensive stocks with low IVs for getting long strangles and straddles. We can buy the 105 calls for just over $1.00. This is incredibly cheap and presents a much better short term play than buying the stock outright.

Trade: Buy to open NKE February 105 calls for $1.07.

OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.

Mark can be followed on Twitter at twitter.com/OptionPit.

T3Live can be followed on Twitter at twitter.com/_t3Live_

At the time of publication, Jill Malandrino, Mark Sebastian and Scott Redler held no positions in the stocks or issues mentioned.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,819.09 +40.94 0.23%
S&P 500 2,069.00 +7.77 0.38%
NASDAQ 4,762.8260 +14.43 0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters