Puts are running at double the intraday average volume
Nike Inc (NYSE:NKE) is in the midst of a record losing streak, fresh off 10-straight daily losses, amid stockpiling inventory and China’s consumer woes. A dismal annual forecast from Dick’s Sporting Goods (DKS) didn’t help things yesterday, as the athletic portion of the retail sector took a large hit after the news.
Nike stock is slightly higher at last glance, up 0.2% at $98.95. Yesterday’s slide sent the shares below the $100 level for the first time since November, while NKE’s 320-day moving average has been keeping a lid on gains since mid-May. Year-to-date, the equity is down 15.9%.
It’s worth noting that the security’s relative strength index (RSI) of 11.2 sits deeply in “oversold” territory, which typically indicates a short-term bounce is on the way. Options bulls don’t appear to be buying in on the dip, however. So far today, 15,000 puts have been exchanged, which is double the amount typically seen at this point. The weekly 9/22 95-strike put is the most active, with new positions being bought to open there.
Now looks like a good time for options traders to weigh in, as NKE is seeing attractively priced premiums at the moment. The stock’s Schaeffer’s Volatility Index (SVI) of 26% ranks in the 16th percentile of its annual range, meaning options traders are pricing in low volatility expectations.