Investors in Pfizer Inc (PFE) have new options available today with a May 1st expiration, including a notable put contract at a $24.00 strike price, currently with a bid of $1.43. If sold-to-open, this put obligates the buyer to purchase shares at $24.00 while collecting the premium, effectively reducing the cost basis to $22.57, an 11% discount to the current trading price of $26.96. The chances of this contract expiring worthless are estimated at 74%, potentially offering a 5.96% return on cash commitment, or 43.50% annualized.
Additionally, a call contract at the $31.50 strike price is also available with a bid of $1.03. Should investors purchase shares at $26.96 and sell-to-open the call, they commit to selling at $31.50, resulting in a potential total return of 20.66% if called away by expiration. The odds of this call contract expiring worthless are about 66%, which could yield an additional return of 3.82%, or 27.89% annualized. Implied volatility for the put is at 73% and for the call at 78%.
