) -- Shares of
are currently trading down 83 cents to $61.26 without any news from the company, and at least one investor expressed moderate bullishness on a bet that the stock could at least hold its current levels.
Take a look at a put one-by-two spread in NKE, as an investor bought one March 62.5 call for a premium of 2.98 and sold two March 60 calls at a premium of $1.74 each for a net credit of 50 cents per spread.
The March 60 calls have crossed more than 6,300 times versus open interest of 2,300 contracts. The March 62.5 calls have traded 3,000 times and are home to open interest of 1,000 contracts (investors traded these spreads to open).
Though this trade looks like a lot of put volume at face value, investors bought some of the puts and sold others. Investors will make a maximum profit of $3.00 on this spread if NKE shares expire at $60. The investor makes money all the way down to $57, at which point the spread loses dollar for dollar all the way down to $0.
NKE, which has not announced an earnings release date, is likely to report sometime around March 17. In that case, this put-one-by-two will not have expired yet, so the investor will get an opportunity to use the earnings event to shoot for maximum profits.
-- Written by Jud Pyle in Chicago
At the time of publication, Pyle did not have a position in the stock mentioned. Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."