Looking at Nike’s longer-term price history helps frame the current situation. On a multi‑year view, the share price is still well below its earlier highs, reflecting a period of pressure on growth and margins. From a technical perspective, the stock remains far below its long-term trend line, often represented by the 200‑week moving average.

Zooming in to the daily chart, the picture is more balanced. The share price has recently stabilised around the mid‑60s area and is trading close to its 200‑day moving average. In simple terms, this means the market is no longer in free fall, but it is also not in a strong uptrend.

For investors, this kind of setup often leads to a simple question: what if I could buy the shares a bit lower, with a margin of safety, rather than committing at today’s price?

Why earnings weeks are different

Around earnings, uncertainty rises. Investors do not yet know whether results will beat or miss expectations, or how management will guide for the coming quarters. This uncertainty shows up clearly in the options market.

Options are contracts that reference the share price, and their prices reflect how much the market expects the stock to move over a certain period. When earnings are imminent, option prices usually rise because the potential for a sharp move increases.

This expected move is often summarised as a range. For Nike, the options market currently implies that the share price could move by roughly 7% up or down between now and the end of this week, which corresponds with the 19 December expiry. Translated into plain language: the market is saying that a noticeable jump or drop is considered normal, not exceptional, around this earnings release.

What the options market is signalling

The option chain shows many possible price levels, each with its own premium. Rather than focusing on all the details, it helps to step back and ask a simple question: at what price would I genuinely be happy to own Nike shares?

In the current setup, the USD 62.50 level stands out. This is meaningfully below the current share price, and it sits near the lower end of the market’s expected earnings move. In other words, it represents a price that already assumes some disappointment or caution.

Now comes the key insight. Because earnings uncertainty is high, investors who are willing to commit to buying at that level can receive a premium today. That premium is the market’s way of compensating them for taking on that obligation during an uncertain week.

The idea in simple terms: a paid commitment to buy

Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

Instead of buying Nike shares outright, this approach starts with a conditional promise.

You commit to buying Nike shares at USD 62.50 if the market trades below that level by the end of the week. In exchange for making that commitment, you receive an upfront payment of about USD 0.85 per share.

This payment is credited to your account immediately. It is yours to keep, regardless of what happens next.

This structure is often described as a paid limit order. You are not chasing the share price. You are setting your own buy level and being compensated for your patience.

What the numbers really mean

Let’s translate the key figures into everyday investor language.

• Premium received: about USD 0.85 per share. That is USD 85 for one contract covering 100 shares.
• Buy level if assigned: USD 62.50 per share.
• Effective entry price: about USD 61.65, after accounting for the premium received.

Looked at another way, the USD 0.85 premium represents roughly 1.4% of the USD 62.50 commitment for a single week. If Nike stays above the buy level and the shares are not purchased, that short-term income can be expressed as a much higher annualised figure, but this comparison is only illustrative and assumes similar conditions could be repeated, which is never guaranteed.

Compared with a share price around USD 68, this means you are aiming to own Nike at a discount of roughly 9%, with an additional buffer built in by the premium.

Three possible outcomes after earnings

This kind of setup has very clear outcomes. There are no hidden scenarios.

1. Nike stays above USD 62.50
   If the share price remains above your chosen level, nothing else happens. You keep the USD 85 premium, and you are free to reassess your view on the stock.
2. Nike dips slightly below USD 62.50
   If the share price ends the week just below that level, you may end up buying the shares. Your effective entry price is still lower than today’s price because of the premium you collected.
3. Nike drops sharply
   If earnings disappoint significantly, the shares could fall well below USD 62.50. In that case, you still buy at the agreed level, and losses below your effective entry price behave much like owning the shares directly. This is the key risk and must be accepted upfront.

Why this can make sense for long-term investors

This approach is not about predicting earnings. It is about positioning.

If you already like Nike as a long-term holding, and you would be comfortable owning it at a lower price, this method allows you to either:

• get paid for waiting, or
• acquire the shares at a discount if the market overreacts to short-term news.

What it does not do is eliminate risk. It simply reshapes when and how you take it.

Risks to understand before using this approach

• Earnings gaps: because results are released after the close, prices can jump or drop before you have time to react.
• Commitment is real: if the shares fall, you must be willing to own them at the effective entry price.
• Not a cash substitute: this is more conservative than buying shares today, but it is riskier than staying in cash.

A final checklist before considering this strategy

Before using this kind of setup, ask yourself three simple questions:

1. Would I be comfortable owning Nike at around USD 61–62 for the medium to long term?
2. Am I prepared for short-term volatility after earnings?
3. Do I understand that the premium is compensation for taking on this risk, not a free bonus?

If the answer to all three is yes, earnings volatility can be turned from a source of anxiety into a structured opportunity.

The key is not the option itself, but the discipline of setting a price you are genuinely happy with and being patient enough to wait for it.

Conclusion: turning uncertainty into structure

Earnings weeks are uncomfortable by nature. Prices move quickly, headlines dominate the narrative, and emotions often take over. For long-term investors, that environment can feel like the worst possible moment to make a decision.

The approach discussed in this article does not remove uncertainty, but it puts structure around it. Instead of reacting to the earnings outcome, you decide in advance at what price you would be comfortable owning Nike, and you allow the market to either reward your patience or deliver the shares at that level.

This is not about being clever or forecasting short-term moves. It is about discipline, realism, and aligning your actions with your long-term investment intentions.

Frequently asked questions

• Do I need to trade options actively to use this approach?
  No. This is a single, predefined setup. Once entered, there are no moving parts that require constant monitoring during the week. The key decision happens before earnings, not after.
• What happens if Nike falls sharply after earnings?
  If the share price drops well below the chosen level, you may still be required to buy the shares at that level. From that point onward, your risk is similar to owning the shares directly from your effective entry price. This is why it is essential to be comfortable owning the stock.
• Why not wait until after earnings instead?
  Waiting removes earnings risk, but it also removes the premium. This approach is designed for investors who are willing to accept short-term uncertainty in exchange for a better entry price or immediate income.
• Is the premium guaranteed?
  Yes. The premium is credited upfront and does not depend on the outcome of the earnings release. What changes is whether you also end up owning the shares.
• Is this suitable for all investors?
  No. This approach is only suitable for investors who understand that downside risk remains and who have sufficient cash available to purchase the shares if required.