PFE Analysis

Pfizer Inc. (PFE)

PFE publishes earnings on Monday after the closing bell.

I shall use the series of weekly options that trade for the last time 11 days hence, on May 12.

Implied volatility stands at 15%, which is 1.5 times the VIX, a measure of the volatility of the S&P 500 index.

PFE’s IV stands well below my standards in its annual range, at the 5th percentile.. Relative to its most recent broad movement, volatility stands in the 53rd percentile, which meets my standards.

The price used for analysis was $33.80.

Premium: $0.54 Expire OTM  
PFE-iron condor Strike Odds Delta
Calls
Long 35.00 91.5% 9
Break-even 34.54
Short 34.00 59.5% 42
Puts
Short 33.50 58.8% 40
Break-even 32.54
Long 32.00 91.3% 8

The premium is 43% of the width of the position’s wings.

The risk/reward ratio is 1.8:1.

Decision for My Account

The options grid provides insufficient premium to support a trade. I am passing on PFE.

By Tim Bovee, Portland, Oregon, May 1, 2017

One thought on “PFE Analysis

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