Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Hey Traders,

For a while, Pfizer Inc (Ticker: PFE) was the hottest stock in all the land going into the end of 2021. 

2020 was the year of COVID, but 2021 was the year of PFE kicking COVID’s butt. 

But the vaccine was only so effective … and PFE’s stock price went from $60 to $40.

PFE is going back to more normal earning multiples. And even though it was never a high volatility stock, there’s still some residual IV left in it.

PFE 5 year chart with 1 day candles and 30 day and 1 year IVs

Will the volatility go back to more normal levels?

PFE Is An Interesting Vol Buy Below 20%

VIX is starting to see Zone 2 for the first time in several months after visiting it for one day in February. That reversion thing is a powerful factor in trading. 

Stocks can have a very long memory when it comes to volatility, and PFE is no exception.  

I think those IVs are going back to the teen’s. 

The reality is the PFE Jan2024 40 put yields only 5%, which is pretty skinny for a put sale. 

If anything, near the money or just out of the money call calendar spreads look good.

When the bottom of the IV is so close – 19% – there is small risk in a call calendar. 

PFE down 33% from the top is not a bad place to add call calendars with lower vega risk.

To Your Trading Success,

AG