Nike Stock Options Alert: LEAPS Buying Hints at a Bull Call Spread

The S&P 500 futures in Friday's pre-market trading were up on hopes of a peace deal with Iran to end the Middle East war. Yesterday, President Trump said a deal was expected “fairly soon.”

While that’s good news for global economies, the reality is that even if a deal is secured today, oil prices will remain high for weeks or months. Furthermore, the president's remarks could be overly optimistic, with some suggesting it could take as long as six months to reach an agreement between the U.S. and Iran.  

“‘There won’t be a deal between the US and Iran in the short term. President Donald Trump’s optimism is because he’s conscious of market implications,’ said Rob Macaire, former British ambassador to Iran and council member at Chatham House," Bloomberg reported Thursday.  

Let’s hope it’s sooner rather than later. 

In the meantime, markets continue to move along as if nothing unusual has happened in the past two months. Investors are looking beyond the end of the conflict to what comes next. 

With the S&P 500 up 11.5% since hitting a 2026 low on March 30, strong earnings appear to be driving the markets higher. That could continue for some time. 

In yesterday’s unusual options activity, Coreweave’s (CRWV) May 8 $120 call had the highest Vol/OI (volume-to-open-interest) ratio at 123.24. The highest unusually active put option was the Compass Therapeutics’ (CMPX) May 15 $5 put at 66.22.

What caught my eye was a Nike (NKE) LEAPS (Long-Term Equity Anticipation Securities) call option. It sets up nicely for a Bull Call Spread. 

Have an excellent weekend!  

The Nike LEAPS Call in Question 

Nike had seven unusually active call options yesterday. However, it's this particular call I’m interested in. With a DTE (days to expiration) that doesn’t expire for 14 months, the LEAPS call has no intrinsic value because it’s OTM (out-of-the-money) by $2 and has an extrinsic value of $7.90, or about 17.3% of yesterday’s closing share price. 

The Vol/OI ratio of 9.26 was the highest of its seven unusually active call options from yesterday. Although the volume of 2,018 isn’t particularly high--Nike’s 30-day average is 174,214--it was by far the highest of the call’s expiring in 365 days or more. 

More importantly, of the 2,018 June 17/2027 $47.50 call contracts traded, 2,000 were for one trade at 3:17 p.m. ET. Somebody felt spending $1.45 million on Nike LEAPS was worth it. 

Here’s why I think they made a smart bet. 

Nike’s Troubles Are Significant But Surmountable

Bloomberg published an article this morning discussing Nike CEO Elliott Hill’s comeback plan for the company and whether it can save the business and its free-falling stock.      

As the article points out, NKE stock is down more than 28% in 2026. Unless a miracle happens, the stock will finish the year in negative territory for a fifth consecutive year. The share price hasn’t been this low since October 2014, more than 11 years ago. 

“The stock price is reflecting the market’s realization that the turnaround might take a little bit longer than it had thought maybe six months ago or 12 months ago,” UBS analyst Jay Sole told Bloomberg contributor Peyton Forte in an interview. 

From a personal perspective, I haven’t owned a pair of Nikes for as long as I can remember; I prefer Adidas (ADDYY) because they make more walking shoes than performance shoes. That might be a flawed observation on my part, but I suspect there are more people in my shoes (pun intended) than Nike cares to admit. 

Holding on to market share due to increased competition has been tougher than ever for the “Just Do It” brand. 

CEO Elliott Hill worked at Nike for 32 years before retiring in 2020; the board convinced him to return as CEO last October to reenergize its business. Nike’s internal mission statement is now, “Create Epic Shit, Make Athletes Better,” the Guardian reports. 

That sounds great, but it suggests that Nike and Hill himself believe it’s still a growth company. The last time it had 20% year-over-year sales growth was fiscal 1997 (May year-end), although it came close in 2021, up 19% to $44.54 billion. However, over the 4.5 years since, sales have grown cumulatively by just 4.4%. 

Investors have reason to question the likelihood that Nike will return to consistently (and profitably) growing sales by 10% a year.

I'm not sure whether Hill and Nike can return to consistent growth. However, I do believe that former CEO John Donahoe was absolutely the wrong person to run Nike. That hurt the business and the stock. 

Under Elliott Hill, I do think it can get Nike’s groove back, but that doesn’t mean it will return to a $281 billion market cap as it had in 2021. Somewhere between that and its current $68 billion market cap within five years would be a big win. 

The Bull Call Spread Sets Up Nicely

The bull call spread is a defined-risk option strategy where you expect the underlying security to increase in value. It involves buying a call option and selling another call at a higher price for premium income.

Based on the June 17/2027 $47.50 call, you can use a bull call spread to lower the overall cost of the strategy. In the example below from this morning’s trading, the ask price of the $47.50 call is $9.00. You could buy one call for $900 or about 19.6% of its share price. Or, you could also sell a June 17/2027 $57.50 call that’s 25% OTM, receiving $395 in premium income, reducing the overall cost, or net debit, to $505, lowering the cost by 44%. 

You can lose no more than $505 on the trade. The maximum loss occurs if the share price at expiration is below $47.50. However, under the long-call buy, you would lose the full $900, so you’re ahead of the game using the bull call spread. The maximum profit is $495 [$57.50 strike price - $47.50 strike price - $5.05 net debit]. 

So, while you reduce the cost of the trade, you cap your gains, limiting your maximum profit because of the short $57.50 call to 98.02%. Under a long call, while your cost is $495 higher, the maximum profit is unlimited. If the Nike share price goes to $100 by June 18, 2027, your profit would be $4,350, or 483.3%. 

If you are really bullish, the long call on its own is the play. However, if you’re like many of the analysts and are unsure of Nike's ability to rebound, the bull call spread is the safer bet here.