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Nike Options Volume Soar to 2024-High as Stock Sinks Amid Bleak Outlook

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Luzi Ann Santos wrote a column · Jun 28 10:57
$Nike (NKE.US)$ options trading volume soared on Friday to this year's high, making them the fourth-most active stock options in the first half of Friday after the athletic footwear and apparel maker forecast mid-single digit drop in its fiscal 2025 revenue.
Stifel analysts downgraded the stock to hold, noting that the company's latest guidance cut, its second in about six months, is undercutting the credibility of its management, adding more uncertainty to the outlook, Wall Street Journal reported. Morgan Stanley analyst Alex Straton also lowered her rating on the stock to equal weight, as she expects to see earnings volatility in the near term, according to another WSJ report.
Options volume climbed to more than 613,560 contracts as of 11:41 a.m. in New York. That puts Nike's options trading behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$ and $Advanced Micro Devices (AMD.US)$, data compiled by moomoo showed.
About half of that Nike volume was in contracts expiring this week and the next, with the heaviest concentration in call options giving the holders the right to buy the stock at $80 and $79 each. The value of those call options expiring at the close of trading today evaporated as shares tumble more than $18 or 19% to $75.99.
Source: moomoo PC app.
Source: moomoo PC app.
The guidance for the fiscal year ending May 2025 added to investor worries after Nike reported fourth quarter revenue of $12.61 billion, missing the average estimate of $12.86 billion from analysts polled by S&P Capital IQ.
Nike Chief Financial Officer Matthew Friend told analysts that "continuing challenges on Nike Digital, muted wholesale order books" and a softer outlook in China are among the factors that could push the company's revenue down 10% in the first quarter, according to the earnings call transcript from Capital IQ.
Source: moomoo PC app
Source: moomoo PC app
Big money are also taking bearish positions in Nike options. One of the two biggest bearish block trades was for put options that give the holder the right to sell 100,000 shares at $92.50 each by Jan. 17, 2025, according to data compiled by moomoo. The buyer of those puts paid a premium of $1.71 million, close to the ask price.
The other big bearish position was also for put options that give the buyer the right to sell 150,000 Nike shares at $88 by the end of next week. The buyer paid a premium of $1.71 million for that block trade, the data showed.
Source: moomoo PC app.
Source: moomoo PC app.
(To see Nike's options chain, click here.)

Not everyone is bearish, at least on the outlook of the company next year. A financial giant sold put options that give the buyer the right to sell 200,000 Nike shares at $82.50 by Jan. 17, 2025. The seller stands to collect a $1.88 million premium for that trade.
Ten of 15 technical indicators tracked by moomoo are also flashing positive signals, showing that the stock could be oversold, and the trend may turn bullish.
Source: moomoo PC app
Source: moomoo PC app

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Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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