Q2 STOCKS TO BUY

Blue-Chip Drugmaker Moves Higher on Vaccine Announcement

Options bulls are targeting PFE with ample enthusiasm

Deputy Editor
Oct 16, 2020 at 10:57 AM
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This week was plagued by companies announcing the cessation of their coronavirus vaccine trials, but this morning Pfizer Inc. (NYSE:PFE) announced it would apply for emergency use of its vaccine -- which is being developed with BioNTech (BNTX) -- as soon as late November. The application for Emergency Use Authorization is contingent on certain safety milestones, with Pfizer's CEO emphasizing it would not apply before the third week of November, contradicting U.S. President Donald Trump's comments about an effective vaccine being ready before Election Day. As a result, PFE is up 1.4%, last seen trading at $37.04. 

Today's bump has Pfizer stock trending in the right direction to recapture its pre-pandemic highs. In fact, in January the equity was trading near $41, but has since pullback slightly for 2020. Regardless, PFE is enjoying fresh support from the 80-day moving average.

In the options pits, bulls are charging toward PFE. The equity's 10-day call/put volume ratio of 11.13 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the elevated 91st percentile of its annual range. In other words, calls are the hottest item on the menu at the moment, and are being ordered up at a quicker-than-usual rate. Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.28 sits in the lowest percentile of all readings from the past year, also suggesting that short-term options traders have been more call-biased of late.

Echoing this, already, over 28,000 calls have exchanged hands -- three time the intraday average and volume pacing in the 97th percentile of its annual range. Most popular are the November 39- and 34-strike calls, where both positions are being bought to open.

 
 

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