Nike Stock Options Pricing In a Bigger-than-average Post-earnings Move

By Tomi Kilgore Markets MarketWatch Pulse

Nike Inc. options are pricing in a bigger-than-average one-day move for the stock after the athletic apparel and accessories maker reports fiscal fourth-quarter results after Thursday's close. An options strategy known as a "straddle," which involves the simultaneous buying of at-the-money bullish call and bearish put options for Friday expiry are pricing in a 5.1% move in either direction on Friday. Straddles are pure volatility plays, and aren't bets on a direction. The average one-day post-earnings move for the stock after the past 20 quarterly reports is 4.8%, while the mean move is 3.8%. The stock had dropped 7.1% on March 22 after fiscal third-quarter results, and rose 1.0% on Dec. 21 after second-quarter results. Nike's stock was little changed in morning trade, and has gained 5% year to date, while the Dow Jones Industrial Average has climbed 8.4%.

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