Novice Trade: Nike

Nike (NKE), which is set to report its latest quarterly earnings on March 22, has been slammed somewhat ahead of the announcement. This is odd considering how well the last quarter was. Generally, stocks tend to rally ahead of earnings and March regular volatility is cheap, at below 29%.

I believe owning calls ahead of earnings makes sense, as NKE should catch some speculative buying next week ahead of results. I can buy the calls that are just out of the money for under $1.00. It will not take a strong move out of NKE for those to pay off quickly. I would buy the March 59 calls for $0.90, with the intention of selling at $1.50 or $0.50....8 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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