NaughtyPines

THE WEEK AHEAD: NKE EARNINGS; CRON, IQ, NTNX, EWZ

NYSE:NKE   NIKE INC
This post is going to be short work, since there aren't many earnings in play for next week, and non-earnings premium selling is somewhat limited ... .

NKE is the only earnings that comes up on my radar for next week (announces on Tuesday after market close). While it has an implied volatility rank of 72, its 30-day isn't exactly "doing it" at 29%. That being said, the slightly short delta, 68% probability of profit, Oct 19th 80/90 short strangle pays 1.72/contract at the mid.

Other top implied volatility underlyings include CRON at 140%, IQ at 60%, and NTNX at 54%, but these underlyings aren't the best in terms of expiry and strike availability, which can make for headaches if you need to roll. I've already experienced some of this in a CRON play; there was no November available after the October monthly, so had to roll all the way out to January, which can be a drag if you're less than the patient type ... . I pretty much knew that it could be a headache going in because of oddball expiry availability, but couldn't pass on the juiciness.

On the non-earnings front: "The Brazilian" -- EWZ continues to be frisky (but not quite as frisky as it was) with a rank of 69 and a 30-day of 47%. The November 29/40 short strangle camped out at the 21 delta has a probability of profit of 70%, break evens of 27.35/41.62, and pays 1.65 -- not bad for an extremely liquid $34 underlying.

Hello how are you.

Thank you for your idea , you think NKE would beat the earnings?

Thank you.
Reply
@LDAMATO, I generally play these to stay within the expected move, which means I'm fine with it going up or down, but not too much up or down. I otherwise don't have an opinion as to direction in the short-term, since you can get favorable earnings, but a market reaction to those earnings that goes totally the other way for whatever reason (i.e., earnings weren't "good enough") or bad earnings, but a market reaction that goes the other way ("Well, they weren't as bad as expected.").
+1 Reply
LDAMATO NaughtyPines
@NaughtyPines, Yes seems difficult to know where this stock goes when reported , the stock its really high now on price basically at the highest in the 52 weeks , in think a put before earning could be a good move what do you think ?
Reply
@LDAMATO, The expected move is +/- 3.80. If I were to play it directionally, my inclination would be toward the short side. It's already had quite a run-up since June earnings ... .
Reply
LDAMATO NaughtyPines
@NaughtyPines, make a short sell or a put ? you think ?
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@LDAMATO, Long puts ... . You're only out what you paid if you end up being wrong.
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LDAMATO NaughtyPines
@NaughtyPines, yes right with the short sell the losses can be infinity haha , i will try to make a put but im not sure yet right now for me its very difficult to know the movement of NKE.
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