MRK and PFE have both been quiet on the charts lately
Stocks are struggling for direction today, and one sector that represents this choppiness is blue-chip drugmakers. Merck & Co Inc (NYSE:MRK) and Pfizer Inc (NYSE:PFE) are both making outsized moves -- in opposite directions -- with the only common thread the ramped up option activity in response.
MRK Eyes Worst Day in 17 Years
Merck, the maker of cancer drug Keytruda, reported fiscal year guidance below estimates. The whiff overshadows an earnings beat, and the stock is down 11% to trade at $88.60 at last check, on track for its worst single-session decline since 2008. The shares earlier fell to a two-and-a-half year bottom of $87.33, and are now nursing a 30% year-over-year deficit.
Calls quickly outflanked puts this morning, with 30,000 of the former crossing the tape, 10 times the average intraday amount. Most of this attention is at a LEAPS trade at the January 2027 100-strike call. Nearer term, the April 90 and March 95 strike calls are buzzing.
Pfizer Slowly Bouncing Back
PFE is up 2% to trade at $26.75, after the company's fourth-quarter earnings and revenue both exceeded expectations. Pfizer stock has traded in a tight range year-to-date, and today's rise isn't enough to break the consolidation. The shares have at least reclaimed their year-over-year breakeven level, and are now roughly 10% off their Nov. 15 12-month lows of $24.48.
At last check, 30,000 calls have changed hands, volume that's double the average intraday amount and nearly triple the number of puts traded. The weekly 2/7 27-strike call is the most popular by a wide margin.