Options Corner: NKE Earnings Trade

Group 1: Core Weaver and Meta Platforms - Core Weaver announced a deal worth over $14 billion with Meta Platforms to supply computing power, leading to an 8% rally in its stock during pre-market trading [1] - The CEO of Core Weaver stated that Meta was impressed with their infrastructure from previous contracts, prompting this new agreement [1] Group 2: Nike's Performance and Market Analysis - Nike's stock has underperformed over the past five years, down nearly 47%, while the S&P 500 has increased by 91.5% during the same period [3] - Despite the long-term underperformance, Nike has shown better year-to-date performance compared to other apparel companies, which are struggling due to tariff uncertainties [4] - Current price patterns indicate resistance levels at $72 to $74, with a notable low at $69, where the stock has stabilized recently [5][6] Group 3: Options Trading Strategy for Nike - Implied volatility for Nike is elevated ahead of earnings, with the options market pricing in a one-day move of approximately $5.30, or about 7.5% [8][9] - A suggested options strategy involves buying a 69 strike call and selling a 78 strike call, creating a bullish vertical spread with a risk of approximately $270 per spread [12] - The break-even point for this strategy is set at $71.70, which is only 3% above the expected opening price, making it a favorable risk-reward setup [13]