Pfizer Inc. (PFE)

Update 1/31/2017: Prices rose then dropped back after earnings wee published. Implied volatility fell sharply. I chose to exit PFE because it goes ex-dividend on Feb. 1, and i’m wanting to avoid the likelihood of early assignment.

Shares rose by 0.8% over one day, or a +281% annual rate. The options position produced a 6.6% yield on debit for a +2,413% annual rate.

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PFE publishes earnings on Tuesday before the opening bell.

I shall use the MAR series of options, which trades for the last time 46 days hence, on March 17.

Implied volatility stands at 20%, which is 1.6 times the VIX, a measure of the volatility of the S&P 500 index.

PFE’s IV stands in the 40th percentile of its annual range and the 57th percentile of its most recent broad movement.

The price used for analysis was $31.13.

Premium:	$1.29	MAR	iron fly
PFE		Odds	Delta
Calls
Long	33.00	88.3%	13
Break-even	32.29
Short	31.00	51.6%	51
Puts
Short	31.00	48.4%	49
Break-even	29.71
Long	28.00	89.6%	9

The risk/reward ratio is 1.3:1.

Decision for My Account

I have entered a position on PFE as described above. The stock at the time of entry was priced at $31.12.

By Tim Bovee, Portland, Oregon, Jan. 30, 2017