Options Trading News

October 2, 2012  Tue 9:50 AM CT

As Pfizer climbs to another five-year high this morning, one trader is looking for the pharmaceutical giant to spike either higher or lower.

PFE is up 0.8 percent to $25.23, its highest level since September 2007. Shares were down at $17.05 a year ago.

The big trade of the day is a block of 20,000 December 25 puts, which appear to have been bought for $0.65 on a wide bid/ask spread, according to optionMONSTER's systems. The volume dwarfed open interest of a mere 703 contracts in the strike at the start of the session, so this is a new position.

Two minutes later, the largest block of stock traded in a single print of 925,000 shares that went for $25.3849. Together, the stock and options seem to have been combined for a long-volatility play.

The implied volatility of the options 15.8 percent, while the 30-day historical volatility is near 52-week lows at 11.5 percent. So the bet is that volatility will pick up in coming months. (See our Education section)
Share this article with your friends

Related Stories


How fast money flowed in Pfizer

September 25, 2015

The pharmaceutical company been has been range-bound since last month's big market drop but is one of the stronger drug makers overall.



The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »