Option Traders Blast PFE After Earnings, Revenue Beat

Pfizer saw $3.5 billion in revenue for its Covid-19 vaccine during the first quarter

Deputy Editor
May 4, 2021 at 10:46 AM
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The shares of Pfizer Inc. (NYSE:PFE) are down 0.8% at $39.62 at last check, despite the drug maker reporting first-quarter earnings and revenue that beat Wall Street's forecasts. Additionally, the company raised its full-year guidance, following stronger-than-expected Covid-19 vaccine revenue, which amounted to $3.5 billion. Pfizer also said it plans on filing for full U.S. approval for its vaccine by the end of May. Separately, according to federal officials in an interview with The New York Times the Food and Drug Administration (FDA) is slated to authorize filing the vaccine for adolescents aged 12-15.

On the charts, Pfizer stock earlier logged a new annual high of $40.10. The equity started the year strong before pulling back in late February, though this pullback found support near the $33 level, which catapulted the equity higher. The 20-day moving average has helped along the way, catching an early April dip. PFE is now up 8.5% in 2021.

Options traders from both sides of the aisle are targeting the security with ample enthusiasm today. In the first hour of trading, 49,000 calls and 13,000 puts have exchanged hands, which is four times what's typically seen at this point. Most popular by far is the weekly 5/7 40-strike call, followed by the 40 call in the monthly May series. 

Meanwhile, the options pits have been overwhelmingly bearish over the last 10 weeks.  This is per PFE's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 99th percentile of its annual range and indicates puts are getting picked up at a faster-than-usual rate. 

Now looks like a great opportunity to bet on Pfizer stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 30% stands higher than just 25% of readings from the past 12 months. In simper terms, the equity is sporting attractively priced premiums at the moment. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) sits at 86 out of a possible 100. This means PFE has managed to exceed these volatility expectations during the past year -- a boon for option buyers. 


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