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Options Bulls Blast Pfizer Stock on CDC Endorsement

Call volume is running at triple the intraday average

Digital Content Manager
Nov 3, 2021 at 10:43 AM
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Pharmaceutical concern Pfizer Inc. (NYSE:PFEis struggling for direction this morning, last seen up 0.1% at $45.52, after the U.S. Centers for Disease Control and Prevention (CDC) recommended the use of its Covid-19 vaccine on children ages 5 to 11. This makes approximately 28 million kids eligible for the shot, which will start being administered today. The security also received a price-target cut from SVB Leerink to $48 from $50, following its third-quarter earnings and revenue beat. 

Pfizer stock yesterday surged to its highest trading level since September, though the shares remain far off their Aug. 18 all-time high of $51.86. A new ceiling seems to be emerging at the $46 level, though the 10-day moving average is still acting as a solid source of support for the equity. Year-over-year, PFE up 32.2%.

The options pits are overwhelmingly bullish towards Pfizer stock. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PFE's 10-day call/put volume ratio of 9.54 sits higher than 94% of readings from the past year. This means calls have been getting picked up at a much faster -than-usual clip.

That optimism is reverberating today. So far, 63,000 calls have exchanged hands, which is three times the intraday average. Most popular by far is the weekly 11/5 46-strike call, followed by the November 50 call. 

Options look like a solid choice for those wanting to weigh in on PFE's next move. The equity's Schaeffer's Volatility Index (SVI) of 26% sits higher than 19% of readings from the past 12 months, indicating options traders are pricing in low volatility expectations right now.

 

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