NaughtyPines

TRADE IDEA: NKE APRIL 1ST 60/70 SHORT STRANGLE

NYSE:NKE   NIKE INC
Here are the metrics for the setup:

Probability of Profit: 73%
Max Profit: $100/contract
Buying Power Effect/Risk: $846/contract; Undefined Risk
Break Evens: 59/71

Alternative: April 15th 56.5/60/69/72.5 iron condor

Probability of Profit: 61%
Max Profit: $100/contract
Buying Power Effect/Risk: $250/contract; Defined Risk
Break Evens: 59/70

Notes: As you can see, there are pros and cons to the short strangle versus the iron condor. The short strangle has a higher probability of profit, but requires more buying power and the risk is undefined. The iron condor has a fairly nice defined risk buying power metric of $250/contract, but the probability of profit is less (and I had to go farther out in time in order to get decent long options; the longs in the April 1st expiration at basically the same strikes were "no bid" on one side or the other ... ). The break evens of both setups are nearly identical, however.
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