Mike Khouw's Nike Options Trade

On CNBC's "Options Action," Mike Khouw spoke about an options trading idea in Nike Inc NKE. The company is going to report earnings on Tuesday and Khouw wants to use elevated implied volatility for the event to put on a put calendar.

He said the stock is reaching a very tough price level as it is trading close to its all-time highs. Additionally, it's very close to its peak valuation, with price to earnings just under 34.

See Also: Dan Nathan's Amazon Options Trade

Khouw wants to sell the Sept. $87.50 put for $2.10 and buy the October $87.50 put for $2.55. The trade would cost him 45 cents.

He expects the earnings report is going to be a non-event and the stock would stay at current levels. If the short put expires worthless his long put would cost him 45 cents and the trade would be profitable below $87.05.