Blue-Chip Pharmaceutical Stock Surges Following Vaccine Update

PFE is trading at its highest level this year

Deputy Editor
Dec 2, 2020 at 2:22 PM
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Blue-chip pharmaceutical giant Pfizer Inc. (NYSE:PFE) is making waves, as the company's coronavirus vaccine -- which was developed with BioNTech (BNTX) -- was granted emergency use approval in the U.K, after it was shown to be 95% effective in preventing COVID-19 infections. Meanwhile, regulators in the rest of Europe and the U.S. have yet to come to the same conclusion, but according to at least one economist quoted on, the decision "will likely lead other countries to quickly follow suit." Below, we'll dig into how today's news has impacted the equities' intraday options activity. 

PFE was last seen up 3.4% to trade $40.75, the stock's highest level in 2020, and earlier traded as high as $41.41. Additionally, the equity has tacked on 17.2% quarter-to-date, and is standing firmly above its year-to-date breakeven. As a result, calls are flying off the shelves. So far today, over 503,000 calls have exchanged hands -- three times the intraday average and volume pacing in the top percentile of the last 12 months. The most popular today is the weekly 12/04 41-strike call, followed by the monthly December 45 call, with new positions being opened at the former contract.

PFE Chart December 2_2

The preference for calls is nothing new, according to Pfizer stock's 50-day call/put volume ratio of 9.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands in the highest percentile of the last 12 months, indicating a heavy preference for bullish bets over the last 10 weeks.

Lastly, the equity's Schaeffer's Volatility Scorecard (SVS) ranks high at 86 out of 100, meaning PFE has tended to exceed these expectations during the past year -- a boon for options buyers.


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