$NKE Options Intelligence

🎯 SELL NKE NOV 21 67.5/65 PUT SPREAD

I recommend a bull put spread because the current term structure shows that near-term options are fairly valued with a clean IV close to baseline historical volatility, and the overall IV rank is moderate (around 45-50%), favoring premium selling. Nike’s stock price at $69.61 is above its 200-day moving average ($69.31), indicating technical support. The stock recently beat earnings and shows steady fundamentals with positive institutional interest but lacks near-term catalysts, suggesting limited downside risk. Selling a put spread below the current price offers defined risk with a high probability of profit in this range-bound environment.

Trade Details:
Sell NKE Nov 21 67.5 Put at approx. $1.30 (bid)
Buy NKE Nov 21 65 Put at approx. $0.60 (ask)
Net Credit: $0.70 (approximate)
Stock Price: $69.61

📊 Trade Metrics

• Max Profit: $70 per spread (credit received)
• Max Risk: $180 per spread (difference between strikes $2.50 minus credit $0.70)
• Breakeven: $66.80 (strike 67.5 minus credit 0.70)
• Probability of Profit: High, since strike is >$2 below current price
• Days to Expiration: 28 days (Nov 21)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Volatility: ~27%
• Current Clean IV near 30-day expiry: ~30%, close to baseline (neutral)
• IV Rank: Moderate (around 45-50%), favoring premium selling over buying
• Market Maker Max Pain: $75, above current price, indicating potential support zone
• Expected Daily Move: ±$2.18 (3.13%), so 67.5 strike is about 2 points below price, a reasonable buffer

📈 Greeks & Volatility

• Delta on short 67.5 put: approx. -0.30 (moderate downside exposure)
• Theta positive for seller, benefiting from time decay
• Vega negative exposure, so position benefits if volatility contracts or stays stable

🎯 Why This Trade

The term structure shows no extreme volatility premium, so buying premium is less attractive. Selling premium via a put spread at 67.5/65 captures income with limited risk below a technical support level (near 200-day MA at $69.31). Nike’s fundamentals remain solid with recent earnings beats and institutional buying (Caitong International Asset Management increased holdings today). Technicals are neutral to slightly bullish with price above 200-day MA and RSI near neutral. No major news catalysts suggest limited volatility spikes. The trade aligns with a moderately bullish to neutral outlook and capitalizes on time decay and stable volatility.

📊 Pro Analysis

• Current IV: ~30% vs Historical ~27% (slightly elevated but fair)
• IV Rank moderate: favors selling premium
• Expected move supports strike selection with a buffer
• Put/Call ratio slightly bullish (0.59), indicating more call interest but balanced put interest
• No earnings until Dec 18, so no imminent event risk

🔍 Earnings Date Check

• Next earnings: Dec 18, 2025
• Recommended expiry Nov 21 is well before earnings, so this trade does NOT seek to capture earnings volatility but instead targets premium decay in a stable period

💡 Trade Management

• Entry: Place limit order to sell the 67.5 put at $1.30 and buy the 65 put at $0.60 for a net credit around $0.70
• Target: Close position at 50% profit (~$0.35) or let expire if safe
• Stop: Consider closing if NKE falls below $66.80 (breakeven) or if volatility surges significantly
• Time Stop: Close 2 days before expiration to avoid last-minute gamma risk

📅 Market Overview

Nike’s stock trades near $69.61, above its 200-day MA ($69.31), showing technical support. The broader market is stable with no major catalysts for Nike today. Nike recently reported strong earnings and continues to have solid fundamentals (EPS growth, revenue beat). Institutional buying was noted today but no major news, so the market is digesting recent gains. The options market shows moderate implied volatility with no extreme skew, favoring defined-risk premium selling strategies like bull put spreads. The Fed’s recent policy stance is steady, and no immediate macro risks affect Nike specifically.

🔒 Pricing Validation

• 67.5 Put intrinsic value: $0 (OTM), trading at approx. $1.30 (bid) - above intrinsic ✅
• 65 Put intrinsic value: $0 (OTM), trading approx. $0.60 (ask) - above intrinsic ✅
• Put-Call Parity: Checked for similar strikes, holds within tolerance ✅
• Spread pricing verified: Debit spread cost ($1.30 - $0.60 = $0.70 credit) is consistent with market prices ✅

Confidence Level: Moderate to High
The trade has defined risk, good technical support, and no imminent earnings event risk. It benefits from time decay and stable volatility in a stock with solid fundamentals. The risk is limited to $180 per spread with a reasonable buffer below current price.

Risk Assessment:
• Max loss limited and known upfront
• Risk of stock dropping below breakeven (~66.80) is mitigated by technical support and no negative news
• Moderate exposure to volatility spikes; can be managed by closing early if needed

This trade suits a moderately bullish or neutral outlook on Nike over the next month, aiming to collect premium with controlled risk.