Nike shares are down ahead of Thursday's after-the-bell earnings, and some savvy traders are betting the stock could have more pain after it reports.
"The stock has performed very well and did break out before the S&P has," options expert Dan Nathan said Wednesday on CNBC's "Fast Money." Shares of the athletic apparel and footwear company are up 10 percent year to date, while the broader S&P 500 index is up just more than 2.5 percent in the same period.
According to Nathan, the options market is implying a 3.5 percent one-day move in the stock in either direction, that's 1 percent lower than the four-quarter average. And by his measure, the movement is likely to be lower.
Nathan pointed out that Nike's forward price-earnings is trading at a 10-year high. "Nike is a premium company with a premium brand and a premium valuation, but it's also priced for perfection," said Nathan, founder of RiskReversal.com. "If there's any downward guidance, I think you're going to see the stock down at $100 very quickly."
That $100 level also corresponds with the stock's longer-term uptrend. "I really think the stock needs to hold this uptrend that's been in place over the last few years," added Nathan. But in his eyes, the pullback could actually be healthy for the stock. "As long as the stock stays above $100 I think it will be fine," Nathan said.
Wall Street analysts are expecting Nike to report earnings of 83 cents per share in its fiscal fourth-quarter results, according to FactSet.