I wanted to update the Nike (NKE, $48.19, down $1.18) trade from last Thursday. When I mentioned the stock it was trading at just a hair below $50 and I had talked about the weakness it was displaying. The shares touched a low of $48.19 on Thursday after the blog, and traded as low as $47.61 on Friday. Today, the stock made a low of $47.35 and closed on Thursday’s low.

The December 50 puts (NKEXJ, $3.10, up $0.50) were trading for $2.25 at the time and we had a stop of $2.00 and a target of $3.00 or higher as an exit point. The $3 target was actually hit on Friday and the put options finished at $2.60. Now, some of you may have left the trade open and that’s okay to a degree but the original target was met on Friday and again today.

I also liked the January 45 puts (NKEMI, $2.30, up $0.10) which were going for $1.90 at the time. We also had a target of $3.00 on these put options as well which was also hit on Friday. The weekend knocked off a little of the time premium that was built into these options but they are still higher from our original entry level.

Nike will report earnings this Wednesday AFTER the closing bell so keep this in mind if you still have open positions. Remember the saying…Bulls make money, bears make money…pigs get slaughtered.

Rick Rouse