Investors in Pfizer Inc (PFE) saw new options trading commence on November 20, 2023, with a notable put contract at a $23.00 strike price currently bid at 59 cents. Selling this put would obligate investors to purchase shares at $23.00, effectively reducing their cost basis to $22.41. This strike price represents a 12% discount from the current trading price of $26.09, with a 70% chance the contract may expire worthless, resulting in a potential 2.57% return on cash commitment.
Additionally, a call contract with a $29.00 strike price has a current bid of 64 cents. If an investor executes a covered call, they would be committing to sell shares at that price, potentially achieving a total return of 13.61% if the shares are called away by the expiration date. This strike price represents an 11% premium to the current stock price, with a 68% likelihood of the contract expiring worthless, resulting in a 2.45% additional return on investment.
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