Nike Stock Gaps to 4-Year Lows After Downgrade

Citigroup downgraded Nike Inc (NYSE:NKE) stock to "neutral" from "buy," and lowered its price target to $72 from $102, with the firm citing a disappointing meeting with the retailer's CEO. The stock is down 3% to trade at $69.59 at last glance, with Deutsche Bank chiming in with its own price-target cut to $77 from $84.

NKE is pacing for its third-straight loss, as well as its worst weekly performance since June. The security carries a 32.8% year-over-year deficit, and earlier gapped to a four-year low of $69.41, breaching a floor at the $70 region that contained its January pullback amid long-term pressure from its 100-day moving average.

Options volume is running at double the intraday average volume, with 38,000 calls and 30,000 puts exchanged so far today. The most active contract is the January 70 put, with new positions being opened there.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NKE's 50-day call/put volume ratio of 2.32 ranks higher than 88% of readings from the past year. This indicates traders have been much more bullish than usual.

Regardless of direction, options are an attractive route. This is per the equity's Schaeffer's Volatility Index (SVI) of 28%, which stands in the 18th percentile of the last 12 months.