Stock message boards
MNV
Market News Video
MNV MNV 10 Stocks Crossing Below Book Value
MNV
MNV
MNV
MNV
MNV
MNV
MNV
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

Pfizer Enters Oversold Territory
Thursday, October 16, 11:35 AM ET, by Market News Video Staff

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, ...

DLN, T, PFE, MRK: Large Inflows Detected at ETF
Friday, October 17, 10:55 AM ET, by Market News Video Staff

Symbols mentioned in this story: DLN, T, PFE, MRK Exchange traded funds (ETFs) trade just ...

PFE February 2015 Options Begin Trading
Monday, October 20, 11:19 AM ET, by Market News Video Staff

Investors in Pfizer Inc (PFE) saw new options become available today, for the February 2015 ...

One Put, One Call Option To Know About for Pfizer
Monday, October 20, 12:19 PM ET, by Market News Video Staff

Consistently, one of the more popular stocks people enter into their stock options watchlist at ...

Pfizer Now #16 Largest Company, Surpassing AT&T
Wednesday, October 22, 4:42 PM ET, by Market News Video Staff

In the latest look at the underlying components of the S&P 500 ordered by largest ...

  More articles:  1 2 3 4 5 6 7 next »

PFE October 19th Options Begin Trading

By Market News Video Staff, Monday, June 24, 1:29 PM ET
Play Video: The Importance of ETFs


If the video does not load after a few moments, Upgrade to the Latest Flash Player.

Investors in Pfizer Inc (NYSE:PFE) saw new options become available today, for the October 19th expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 117 days until expiration the newly available contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the PFE options chain for the new October 19th contracts and identified one put and one call contract of particular interest.

The put contract at the $27.00 strike price has a current bid of $1.06. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $27.00, but will also collect the premium, putting the cost basis of the shares at $25.94 (before broker commissions). To an investor already interested in purchasing shares of PFE, that could represent an attractive alternative to paying $28.16/share today.

Because the $27.00 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 62%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.93% return on the cash commitment, or 12.25% annualized at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for Pfizer Inc, and highlighting in green where the $27.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $29.00 strike price has a current bid of 97 cents. If an investor was to purchase shares of PFE stock at the current price level of $28.16/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $29.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 6.43% if the stock gets called away at the October 19th expiration (before broker commissions). If course, a lot of upside could potentially be left on the table if PFE shares really soar, which is why looking at the trailing twelve month trading history for Pfizer Inc, as well as studying the business fundamentals becomes important. Below is a chart showing PFE's trailing twelve month trading history, with the $29.00 strike highlighted in red:

Considering the fact that the $29.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 59%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.44% boost of extra return to the investor, or 10.75% annualized, which we refer to as the YieldBoost.

The implied volatility in the put contract example is 24%, while the implied volatility in the call contract example is 23%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 248 trading day closing values as well as today's price of $28.16) to be 16%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.


Top Six Most Viewed Stories This Week @ Market News Video:

This Article's Word Cloud:   Channel   Definition   October   Options   Pfizer   Stock   YieldBoost   also   available   call   chart   contract   contracts   covered   current   data   expiration   expire   fillColor   greeks   history   implied   investor   left   month   odds   option   options   premium   price   represent   sell   shares   stock   strike   that   they   this   those   time   today   trading   trailing   twelve   volatility   which   will   with   worthless   would
MNV
MNV
About Us - Advertise - Contact Us - Embedding Videos - Licensing Videos - Partners - mRSS / RSS Feed - Terms of Use - Privacy Policy - Video Widget
MNV
Home  |  Analyst News  Dividend Report  ETFs  Insider Report  Large Caps  Market Movers  Week Ahead Report  Weekly Market Wrap
MNV
MNV MNV Chart Zero Stock Market Game Stock Market Definitions
MNV

PFE October 19th Options Begin Trading | Market News Video | Copyright © 2008 - 2014, All Rights Reserved

Any ideas and opinions presented in all Market News Video clips are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.