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NKE

OPENING: NKE MARCH 31ST 54.5/58.5/59/63 IRON CONDOR... for a 2.23 credit. (Earnings volatility contraction play). Metrics: Probability of Profit: Coin Flip Max Profit: $223/contract Max Loss/Buying Power Effect: $177/contract Break Evens: 56.27/61.23 Notes: I filled this at open, but price has moved down somewhat, so you may want to adjust the setup by a half strike or so. In any event, this thing's so narrow, that's it's almost an iron fly, so I'll look to manage at 25% of max profit.
NYSE:NKE
by NaughtyPines
THE WEEK AHEAD: FDX, NKE EARNINGSWith fourth quarter earnings announcements trailing off majorly here, there isn't much in the way of earnings to play, with the earnings of note for premium sellers being FDX, which announces on 3/21 after market close, and NKE (same). FDX is toward the top of its implied volatility range over the past six months (85), with NKE in the 63rd percentile over that same time period. However, background implied volatility in FDX isn't that great (29); neither is NKE (25), so the question remains whether a volatility contraction play in either of those will be particularly productive from a dollar and cents standpoint. Preliminarily, the FDX March 31st 177.5/182.5/207.5/212.5 iron condor plays 1.23 at the mid, somewhat short of the one-third the width of the wings I look for in these plays. With NKE, I would probably either go short strangle or narrow short strangle/iron fly, with the defined risk March 31st 54.5/57.5/58.5/61.5 bringing in 1.69 at the mid, which is also a bit shy of the one-quarter the width of the longs (7 wide) I like to see in an iron fly. Elsewhere, VIX continues to trundle on far below its long term one year (13.9) and three-year moving averages (15.4), extending a sub-15 drought that's been in place since mid-November of 2016, and no liquid exchange-traded fund has the metrics I want to see for a play (>70% implied volatility rank (6 month); >35% implied volatility). I've also been looking at bullish directional plays in either XOP, GDX or both, with my preference being for diagonals to allow me to work the short put over a period of a time rather than doing them as "one off", single expiry credit spreads. Examples: XOP April 21st 35 short put/June 16th 31 long put diagonal; GDX April 21st 21.5 short put/June 16th 19 long put diagonal. Both of these would be put on for a small credit, and I'll post these ideas separately.
NYSE:FDX
by NaughtyPines