Short-term traders targeting Pfizer
David Russell | firstname.lastname@example.org
optionMONSTER's Heat Seeker system detected unusual activity in the Weekly 29 calls expiring next Friday, Sept. 6, where more than 7,800 contracts were purchased. Volume was almost 12 times higher than the strike's previous open interest, indicating that new positions were initiated. Most of the large blocks fetched $0.07.
These long calls lock in the price where shares can be purchased, letting investors cheaply position for a rally. For instance, a gain of barely 3 percent by expiration would more than double the value of the contracts. (See our Education for more on the leverage of options.)
PFE rose 0.77 percent to $28.21 yesterday and has been consolidating for the last six months. It's near the bottom of that range and trying to bounce at its 200-day moving average, which could make some investors think that it's attractive at this level.
Total option volume was twice the daily average in the session, with calls outnumbering puts by a bullish 3-to-1 ratio.
(A version of this post appeared on InsideOptions Pro yesterday.)