Nike ( NKE - news - people ), Inc.: After stepping into some customized NikeiD kicks, bearish option traders ran to get long of puts in the July contract. Shares of the athletic footwear and apparel company have slipped slightly Wednesday by less than 1% to $54.84. NKE appeared on our 'hot by options volume' market scanner after approximately 8,700 puts were snapped up at the July 50 strike price for an average premium of $1.08 apiece. Shares of the global brand must decline 11% from the current price before put-packing-pessimists amass profits beginning at the breakeven point of $48.92.  FedEx Corp. ( FDX - news - people ):The second-largest U.S. package-shipping company has forecast that first-quarter profits are likely to under whelm investors and analysts alike, sending its shares lower by approximately 2.5% to $50.08. The firm continues to wrestle with the "most difficult economic conditions" in its history as businesses continue to pare down spending. The demand for air shipments remains weak, further undermined by rising unemployment. Though green shoots of recovery have been reported, FDX sees economic recovery as a slow process and expects its first two quarters of fiscal year 2010 to be very tough.  Attempts to profit from bearish movement in the stock were observed through the enactment of a put spread in the October contract. The transaction involved the purchase of approximately 12,500 puts at the October 50 strike price for an average premium of 5.22 apiece spread against the sale of 12,500 puts at the lower October 40 strike for $1.60 each. The net cost of the pessimistic play amounts to $3.62 and yields maximum potential profits of $6.38 to the investor if shares fall to $40.00 by expiration. FDX last traded around $40.24 on March 16, 2009. With earnings now out of the way option implied volatility on the stock has plummeted to the current value of 39% from yesterday's closing reading of 49%.  Nordstrom ( JWN - news - people ), Inc.:The fashion specialty retailer of high-quality apparel was accessorized with a large put spread this morning when shares were on the decline, although currently the stock has recovered to gain approximately 1.5% to $19.30. The JWN ticker symbol commanded the top spot on our 'hot by options volume' market scanner following an investor's bearish play in the October contract. The transaction involved the purchase of 20,000 just out-of-the-money puts at the October 19 strike price for $3.40 apiece spread against the sale of 20,000 puts at the lower October 14 strike for a premium of $1.20 each. The net cost of the spread amounts to 2.20 and yields maximum potential profits to the investor of 2.80 if shares sink down to $14 by expiration. Shares must fall about 13% from the current price before the trader breaks even at $16.80.  Humana Inc. ( HUM - news - people ):Shares of the second-largest U.S. provider of government-backed health benefits have rallied less than 1% to $28.43 Wednesday. Options activity on the stock appeared bullish at first glance with the call-to-put ratio indicating that more than 15 calls were traded for every put option in action. However, further investigation of the call options suggested that some 9,200 calls were sold short at the November 32 strike price for an average premium of $2.75 per contract.  This transaction may be consistent with a covered call, initiated by an investor who is long shares of the underlying. If this is the case, writing the calls provides an effective exit strategy for the trader if shares rally through $32 by expiration. If the options land in-the-money, the shares will be called away from the investor and he will have realized gains of about 12.5% on the rise in the stock in addition to the 2.75 premium received for writing the calls Wednesday.  Allstate Corp. ( ALL - news - people ): Early afternoon options action on the insurer comes in the form of hefty call activity centered on the July contract at the 29 strike. With shares trading just 0.3% lower at $23.60 by lunchtime, we're seeing around 16,000 calls at play for a 20 cent premium. This strike is already heavily favored by investors and has an open interest reading in excess of 29,000 contracts. Given the fact that Wednesday's volume is trading in sizable round-lot chunks at mid-market prices, we sense that this is the closing half of a bull play with the option trader possibly taking down some losses.  Microsoft Corp. ( MSFT - news - people ):A large-volume strangle in the January 2010 contract caught our eye amid slight gains of less than 1% to $23.52 experienced by the software maker Wednesday. The strangle strategy involved the sale of 22,000 puts at the January 17.5 strike price for 70 cents each in combination with the sale of 22,000 calls at the January 27 strike for approximately 87 cents premium. The gross premium pocketed by the trader amounts to $1.57 per contract or a total sum of $3,454,000, and will be fully retained as long as shares remain 'strangled' between the two strike prices described by expiration. This individual faces losses at any share price above the breakeven point to the upside at $28.57, as well as at any price below the breakeven to the downside at $15.93.  Andrew Wilkinson is senior market analyst at Greenwich, Conn.-based Interactive Brokers. Reach him via e-mail: ibanalyst@interactivebrokers.com.
Shares of the sneaker outfit take a few steps back and prompt options players to bet on a much bigger slide.