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Nike Bulls Pile Onto Options Market After CEO Change Announcement

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Luzi Ann Santos wrote a column · Sep 21 01:14
$Nike (NKE.US)$ bulls are piling onto the options market Friday amid investor enthusiasm after the athletic footwear and apparel maker brought back a retired executive to lead the rebound of the company that has lost almost 22% of its market value this year.
Shares of the company rallied 6.45% to $86.19 at 12:56 p.m. in New York after the company said the previous day that retired executive Elliott Hill will succeed John Donahoe as president and chief executive officer effective Oct. 14. Before his retirement in 2020, Hill was the president for Nike's consumer and marketplace. Nike also said Hill helped grew the business to more than $39 billion.
Before noon on Thursday, nine bullish unusual trades and two bearish positions were posted. Four of the bullish transactions were from multi-leg trades. The first was recorded at 9:47:23 a.m. Friday with premiums totaling $2.19 million. In that transaction an active buyer paid a $1.25 million premium for call options that give the holder the right to purchase 100,000 Nike shares at $100 by Dec. 18, 2026. The other transaction had the active buyer paying a premium of $935,00 for call options covering a combined 100,000 shares with a strike price of $110, also expiring on the same day.  
Source: moomoo mobile app
Source: moomoo mobile app
(To see the trades above and other unusual options activities on the moomoo mobile app, click here. For Nike's options chain, click here.)
A second multi-leg transaction was posted at 10:02:07 a.m. for call options that are also expiring in 819 days with the same volume, strike price and premiums as the first one, according to exchange data tracked by moomoo.
Although the surge in Nike shares began in after-hours trading Thursday, when the CEO change was announced, a block trade of 2.3 million shares at $88 just seconds after the market opened Friday may have helped fuel the rally. Those shares were worth $202.2 million, according to Bloomberg.
The $88 price tag for that block trade is higher than the average fill price of $86.47 as of 12:37 p.m., according to exchange data tracked by moomoo.
Source: moomoo mobile app
Source: moomoo mobile app
While Barclays analyst Adrienne Yih reportedly said that Hill's appointment as Nike CEO "will help reignite a company-wide focus on production innovation, Williams Trading analyst Sam Poser tempered the expectations. It will take about 15 to 18 months until a true product and brand evolution can be realized, Bloomberg News quoted Poser as saying.  
Amid the share price rally, technical indicators tracked by moomoo are flashing a warning signal. Ten of the 15 gauges are showing the stock could now be overbought and the trend may be turning bearish. Two were neutral and the remaining three, including the moving average convergence divergence (MACD) were showing positive signs.

The increase in the share price pushed the MACD line above the signal line, an event known as golden cross, which is viewed by many who study charts as a signal of potential uptrend.
Source: moomoo desktop app
Source: moomoo desktop app
Got any thoughts on that 2.3 million-share block trade or anything on Nike, please share them in the comment section. And if you have a price forecast for the stock, please vote below.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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