Stock Options On The Move: Nike (NKE), Morgan Stanley (MS), Amazon (AMZN)

| March 26, 2012 | 0 Comments

stock options on the moveWe’ve seen some exciting option activity in Nike (NKE), Morgan Stanley (MS), and Amazon (AMZN) over the past week.  Let’s take a look at these options on the move…

Nike (NKE)

Call and put option activity on Nike (NKE) surged last week.

The athletic footwear and apparel company reported quarterly earnings on Friday.   And option investors were busy placing their bets.

Put option buyers were rewarded when NKE fell nearly 3.5% after reporting earnings.

What’s behind the sell off?

The company reported that higher labor costs are cutting into profit margins.  Gross margins fell by nearly 2% last quarter.  And they said margins were likely to narrow another 1% next quarter.

If Nike can’t make as much money on each pair of shoes they sell then they’re going to have a hard time meeting earnings growth expectations.  That’s not good for the stock, but it’s great for option investors who own puts on NKE.

Morgan Stanley (MS)

Call options on Morgan Stanley (MS) shot higher on Friday.  Shares of the investment bank finished the day up 3.8%.

What’s behind the bullish move for MS?

Analysts are changing their stance on investment banks like Morgan Stanley and Goldman Sachs (GS).  They said things aren’t as bad as they thought…  And going from bad to not so bad can be great for bullish call options. (AMZN)

Call option activity on (AMZN) is heating up.

The stock is up nearly 10% since the start of February.  And investors are quickly buying call options to profit from the surge.

Clearly, they’re expecting the online retailer’s bullish momentum to spill over into this week.

And for good reason…

AMZN has a strong history of bullish price action.  And after a pullback and consolidation over the last few months, it looks like a great opportunity to profit from a bullish rebound in the stock with call options.

Good Investing,

Corey Williams

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Category: Stock Options Trading

About the Author ()

A former banking executive, Corey Williams is the Chief Options Strategist and co-editor of our well-known daily newsletter, Options Trading Research. Corey’s extensive experience with options goes all the way back to his days in corporate finance. It was this decade in banking where Corey discovered the most important skill an options trader can have– the ability to analyze a company or sector to determine its likely future direction. And now he’s brought this background, experience and love of options to Options Trading Research, the unique daily e-letter devoted exclusively to helping individual investors profit from the very lucrative options market.