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October 2, 2012  Tue 9:50 AM CT

PFE: SEE CHART GET CHAIN FIND STRATEGIES
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)
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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