Anticipating the Breakout in NKE

[Steven Place]

After a good earnings reaction, the stock has done nothing for over a month. This is the tightest the bollinger bands have been all year (and I think the tightest in 3 years too).

I’m expecting this stock to resolve higher as the trend is up, and I’m expecting volatility expansion sooner than later.

Using today’s dip as a low risk entry makes sense here. Instead of waiting for the breakout, this is taking advantage of a stop run.

Buy to open NKE Jun 100 calls @2.52 or lower.

Hard stop at 97.48.

Scale half at 103.70 (the earnings day high)

[Steven Place]

103.70 was hit, so time to scale half.

Sell to close HALF SIZE NKE Jun 100 Calls @4.50

[Steven Place]

Going to close on the rest here as NKE is hitting it’s upper Bollinger Band, and there’s only 1 day left in these options.

Sell to close rest NKE Jun 100 Calls @6.50

[Steven Place]

Average exit: 5.50

Average Return on Max Risk: 118%

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