Tuesday, March 21, 2006

NKE trade - 21/3/06

Going to paper trade NIKE, Inc. (NKE) option tonight. NKE would report earnings today after market close (AMC).

NKE is market leader in the apparel & footware industry in terms of market capitalization. Daily trading volume is 1.88M. Would only enter option position some time before market close today.

Noted that DJ US Personal Goods Index broke resistance after mid March 2006. On 28/2/06, Thomas Weisel commented based on channel checks NKE appeared well positioned ahead of the spring season. Currently at 10am EST NKE is at $85.35. April 85 Call is at $2.80 (ie. time value @ $2.50). Implied Volatility is at 24.5, hist. volatility is 11.61.

Would enter option trade near market closing hour.