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Today, we’re opening a new bearish trade on Under Armour (UA). Ever since the CEO at UA diluted the company’s shareholders this spring, we have been watching for an interesting downside opportunity. This is a little close to UA’s earnings report, but, after reviewing the SKX report, we think our chance has arrived and UA is likely to drop significantly.

Most of UA’s industry has been struggling as consumer spending patterns have changed. The 2015 leaders in the industry (NKE, SKX, LULU, GIII, etc.) have already trailed off. We think UA has lagged this selling but is still subject to the same economic factors. The shift of control away from the shareholders to the CEO is likely to amplify any potential selling, which has created a compelling risk/reward projection.

Buy to open the UA November 37.50 Puts (UA161118P00037500).

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.