Nike (NKE) has run up nearly 20% since we initiated our recovery LEAP call spread on renewed optimism in the retail sector.
I am recommending we roll the underlying call spread up to a higher strike and also roll our deep-in-the-money short call out to the December monthly expiration and to a much higher strike. Rolling both of legs will result in a modest net credit and put us in a better position to manage the spread going forward given NKE’s recent advance.
Current Stock Price: $107.37
Cost Basis: $100.57
- Sell to close the 3 NKE Jan 2024 (1/19/24) 70 Calls for around $43.80 each ($131.40 total)
- Buy to open 3 NKE Jan 2024 (1/19/24) 90 Calls for around $29.35 each ($88.05 total)
- Set initial credit limit $14.45 ($43.35 total), but adjust as needed to roll today
- Buy to close 3 NKE Nov Monthly (11/18) 92 Calls for around $15.45 each ($46.35 total)
- Sell to open 3 NKE Dec Monthly (12/16) 115 Calls for around $1.63 each ($4.89 total)
- Set initial debit limit at $13.82 ($41.46 total), but adjust as needed to roll today
New Cost Basis: $98.68