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Shares Keep Falling
Options Put Provides 103% Potential Profit!
Members of “Weekly Options USA,”
Using A Weekly put Option, Make Potential Profit Of 103%,
In Less Than 2 Days,
Trading Downgraded Nike To Sell
Due To Difficulties Suffered With Their U.S.
Where To Now?
Shares of Nike Inc (NYSE:NKE) continued to fall due to a tough macroeconomic backdrop which
prompted Williams Trading to downgrade the stock based on Foot Locker’s sales drop.
This set the scene for Weekly Options USA
Members to profit by 103%, using a NIKE Weekly Options trade!
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Thursday, May 25, 2023
by Ian Harvey
GET YOUR FREE WEEKLY OPTIONS USA TRADING NEWSLETTER
Why the NIKE Weekly
Options Trade was Executed?
have a Foot Locker (FL) problem.
Locker slashed its full-year sales forecast amid what it described as a
"tough macroeconomic backdrop,” there is growing concern on Wall Street
that Nike may also be caught in the crosshairs.
reducing NIKE estimates to reflect indications of slowing U.S. consumer spend
and U.S. athletic footwear channel inventory imbalances,” Stifel analyst Jim
Duffy wrote in a note to clients. “Foot Locker results, commentary, and outlook
Locker’s first-quarter release before the bell on Friday has sent the stock
tumbling more than 30% through two trading sessions. It highlighted declining
same-store sales that could sink as much as 9% this year and “higher than
average” inventories in the first quarter.
accounts for more than 70% of Foot Locker’s sales and is now seeing its stock
drop on Foot Locker's print, with shares down nearly 3% on Monday.
reported non-Nike penetration increasing to 35% in the first quarter, which
equates to mid-teens decreases for Nike sales, largely driven by weakness in
lifestyle running, per Wedbush securities analyst Tom Nikic.
With sporting goods recently having been the worst performing segment in
monthly retail sales, Foot Locker’s outlook has cast a shadow over demand in
the sector. In a note titled “opening downside 90-day catalyst watch,” Citi
analyst Paul Lejuez wrote a consumer slowdown and inventory overhang in the
North American athletic apparel market reflects poorly on Nike’s fiscal-year
“Given the seemingly high inventory levels in the channel (in footwear in
particular) following a pullback in spending from lower income consumers, we
believe the margin setup may not be as favorable as previously thought,”
The NIKE Weekly Options Trade Explained.....
** OPTION TRADE 2: Buy NKE
JUN 02 2023 110.000 PUTS - price at last close was $2.32 - adjust accordingly.
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
Entered the NKE Weekly Options (PUT) Trade on Tuesday, May 23, 2023, at 9:40,
Sold half the NKE weekly options contracts on Wednesday, May 24, 2023, at 11:02, for $3.91; a
potential profit of 103%.
Holding the remaining NKE weekly options contracts for
further profit as the week progresses.
Don’t miss out on further trades – become a member today!
The Situation As It Stands.....
The stock market is in a
state of panic as the US President Joe Biden and House Speaker Kevin McCarthy
have been unable to reach an agreement on how to raise the US government’s
$US31.4 trillion ($A47.3t) debt ceiling with just 10 days before a possible
default, but vowed to keep talking.
The Democratic president
and the top congressional Republican have struggled to make a deal, as McCarthy
pressures the White House to agree to spending cuts in the federal budget that
Biden considers “extreme,” and the president pushes new taxes that Republicans
On top-of-this, Williams
Trading downgraded Nike to sell from hold and slashed its price target for Nike
stock. The firm wrote that Nike's U.S. business has become "far more
difficult than what was expected" when it reported its major Q3 earnings
beat in late March. Meanwhile, the company's recovery in China "appears to
noted the downgrade is based on the U.S. business, which it believes will be
challenged through at least the first half of fiscal 2024. Meanwhile, Nike
lacks new compelling products while consumers may be becoming trained to look
for promotions, according to the firm. Williams Trading slashed its price
target for Nike stock to 95 from 120.
NKE stock fell nearly
4% Monday following the downgrade, the largest decline among Dow Jones
Industrial issues. Nike shares have continued its’ downward momentum since last
As well, the
business has been dealing with ongoing inventory issues ever since supply chain
bottlenecks rattled global supply chains. As of Feb. 28, Nike's inventory
balance of $8.9 billion was up 16% year over year. This was lower than just
three months earlier, but it's not where management wants it to be.
As a result, Nike
has been forced to implement unusually high markdowns and other promotional
activity to spur sales and get rid of outdated merchandise. But this has the
negative effect of hurting margins. In the most recent quarter, the gross
margin of 43.3% was lower than the 46.6% it was in the year-earlier period. And
management expects the gross margin to decline 2.5 percentage points in fiscal
Greater China region, which is typically Nike's fastest-growing geography,
continues to deal with a delayed pandemic recovery thanks to strict lockdown
measures. These restrictions have ended, but sales in Greater China were still
down 8% year over year, performing below analyst estimates.
Nike has lost 13.31% over the past
month. This has lagged the Consumer Discretionary sector's loss of 2.61% and
the S&P 500's gain of 1.61% in that time.
The next Nike earnings release is
expected to see the company report EPS of $0.66, down 26.67% from the
prior-year quarter. Meanwhile, the latest consensus estimate is calling for
revenue of $12.56 billion, up 2.66% from the prior-year quarter.
NKE's full-year Consensus Estimates are
calling for earnings of $3.24 per share and revenue of $50.95 billion. These
results would represent year-over-year changes of -13.6% and +9.08%,
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