Pfizer's Big Vaccine Breakthrough Draws in Options Bulls

Call volume is running at double the intraday average

Deputy Editor
Aug 23, 2021 at 2:39 PM
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The Covid-19 vaccine produced by Pfizer Inc. (NYSE:PFE) in partnership with BioNTech (BNTX) has become the first to receive full approval from the U.S. Food and Drug Administration (FDA). Many are speculating that the fresh approval may encourage more people to get vaccinated, and push more companies to require vaccination for their employees. The news isn't just giving PFE a boost -- with the equity last seen up 2.9% at $50.10 -- it is giving the broader market a lift as well. 

Not only that, it has  sparked an uptick in bullish trading volume in the options pits. So far, 859,000 calls have crossed the tape, which is double what is typically seen at this point. Most popular is the 8/27 51-strike call, followed by the 50-strike call in the same series, with positions being opened at both. 

A shift in sentiment among short-term options traders could help push PFE even higher. The security's Schaeffer's put/call open interest ratio (SOIR) stands higher than 84% of readings from the last year. This means these traders have rarely been more put biased. 

PFE is trading back within a chip shot of its record closing high of $50.49, and earlier came right within striking distance its all-time high of $51.86, touched last Wednesday, Aug. 18. The equity sports a year-to-date lead of 35.7%, with a solid leg of support at its 10-day moving average over the past couple months. 

PFE Aug 23

 

Despite these recent highs, analysts remain skeptical, meaning there could be room for upgrades going forward. Of the 13 in coverage, only four say "strong buy," compared to nine "hold" ratings. Plus, the 12-month consensus price target of $45.44 is a 9.2% discount to current levels. 

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