Stocks quoted in this article:
With Pfizer Inc. (NYSE:PFE - 25.35) advancing to a new annual high on positive news for its Prevenar 13 vaccine, some speculators are taking the opportunity to try and call a top. Put volume is currently running at three times the average pace, with roughly 30,000 contracts changing hands.
The most-active option is the out-of-the-money October 23 put, where almost 22,000 contracts have traded on existing open interest of 16,000. A block of 21,510 contracts hit the tape in one fell swoop, trading for the ask price of $0.02 per contract. Despite the low premium, the block still cost more than $43,000 for the aggressive short-term bet.
For this put to be profitable, the stock needs to dip below $22.98 (strike price minus debit paid) by October options expiration in about two weeks. That's a decline of more than 9% into territory the stock hasn't visited since mid-July. Earnings aren't expected until the end of the month, so the bears don't have the potential for an earnings miss, barring any unscheduled guidance news.
Here are some additional articles of interest: