Pfizer Inc (PFE) investors gained new options on October 9th, including noteworthy contracts at specific strike prices. A put contract at the $26.50 strike currently has a bid of 22 cents, enabling investors to potentially buy shares at a cost basis of $26.28, compared to the current trading price of $27.84. This represents about a 5% discount, with a 64% chance that the contract could expire worthless, offering a potential 0.83% return on cash commitment or 7.05% annualized.
On the calls side, a $29.00 strike price call has a bid of 37 cents. If executed, the total return from a covered call would be 5.50% if shares are called away at expiration, with a 57% chance of the contract expiring worthless, allowing investors to keep shares and the premium, translating to a 1.33% additional return or 11.28% annualized.
The implied volatility for the put contract is 51%, while it’s 25% for the call, in contrast to the trailing twelve-month volatility calculated at 24% based on recent trading data.
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