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Short-term bulls want Nike to sprint

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Short-term traders ran with Nike yesterday.

optionMONSTER's Heat Seeker system detected heavy buying in the Weekly 73 calls that expire at the end of Friday's session More than 5,400 of them traded, mostly for $0.36 to $0.49, in volume far above the strike's previous open interest of just 439 contracts.

These long calls lock in the price where the athletic-apparel stock can be purchased, letting investors cheaply position for a rally. The contracts can provide significant leverage while limiting the amount of capital at risk, but they will expire worthless if shares remain below $73 through this week's close. (See our Education section)

NKE bounced 1.13 percent to $72.71 yesterday but has been falling since it peaked at $80.26 in early December ahead of its last earnings report. The shares appear to have found support around the $72 level this week.

Total option volume in Nike was triple its daily average for the last month, with calls outpacing puts by more than 3 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)

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