PFE – Pfizer, Inc. – Shares of the global pharmaceutical company are up 0.98% to stand at $15.48 with 10 minutes remaining in the trading session. One big options player utilized a total of 60,000 option contracts on the stock in order to establish a long-term bullish stance on the pharmaceuticals firm. In the final hour of the session the trader sold 20,000 puts at the December $15 strike for a premium of $1.16 apiece, and purchased 40,000 calls at the higher December $17 strike for a premium of $0.49 each. The investor responsible for the transaction receives a net credit of $0.18 per contract, and keeps the full amount of premium as long as Pfizer’s share price is greater than $15.00 through December expiration. Additional profits are available should shares of the underlying stock rally 9.8% from the current price of $15.48 to break above the $17.00-level by expiration day in December. Pfizer’s shares last traded above $17.00 as recently as May 12, 2010.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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