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Most Active Options Update: Pfizer Inc. (PFE)

Pfizer Inc. option bulls may be eyeing next week's earnings report

by 7/24/2014 12:02 PM
Stocks quoted in this article:

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest around midday is Pfizer Inc. (NYSE:PFE), with traders picking up front-month calls on the pharmaceutical giant.

Most Active Options Table

Calls are the options of choice on Pfizer Inc. today, with roughly 10,000 calls and 3,500 puts changing hands so far. The most active strike is PFE's August 31 call, where 3,353 contracts have traded. Most of these near-the-money options changed hands at the ask price -- including a sweep of 1,096 -- and data from the International Securities Exchange (ISE) suggests these short-term bets are being bought to open.

By purchasing these front-month calls on PFE, the traders are betting on the Dow component to rally above $31 over the next several weeks. Based on the option's volume-weighted average price (VWAP) of $0.21, breakeven on today's purchased August 31 calls will be $31.21 (strike price plus VWAP) at expiration. To put that bullish forecast in perspective, PFE is fractionally higher at last check to trade at $30.42.

Today's call buyers might be looking ahead to next Tuesday, when Pfizer Inc. (NYSE:PFE) is scheduled to reveal its second-quarter earnings ahead of the bell. Unfortunately, the stock's post-earnings history doesn't always favor the bulls. PFE has matched or exceeded Wall Street's profit estimates in seven of the last eight quarters, but the stock is down 0.9%, on average, one week after earnings.


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