Pfizer (PFE) loses 19 cents to $22.89 on relatively light volume of 23 million shares, even as the drugmaker’s quarterly earnings report looms. The company is due to report tomorrow morning. Options on the stock are busy ahead of the results. 96,000 calls and 34,000 puts so far. Weekly and May $23 calls are the most actives and the flow includes a spread, in which the strategist apparently sold 7587 Weekly $23 calls on PFE at 25 cents and bought 7,587 May 23 calls for 33 cents. The spread, for an 8-cent debit, possibly reflects expectations that the stock won’t see much movement around the earnings release, but will see some strength in the days/weeks that follow. Indeed, PFE has not seen big moves around earnings lately. The average daily post-earnings move during the prevoius two quarters was just .6 percent. Nevertheless, 30-day ATM implied vols are up about 7 percent to 20 today ahead of the news.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.