While I forward easing back into work on Monday, albeit with a reduced schedule, Covid-19 still has a lot of legs.
And the market still is mispricing some stocks.
Take a gander below to see which ones.
(Also, thanks to Mark Sebastian for such a great week of trades and market goodies while I was mostly out. I’ll be back to helping come Monday.)
Graphic Display
I like posting graphs in blogs and then letting people guess which ones they are …
I won’t make you wait too long today … the graph below is Pfizer (Ticker: PFE).
Note that PFE is in an increasing realized vol trend for most of the month of August. I rode some Capitol Gains calls during that time and will most likely reload some on Monday.
Also note that the implied vol is still relatively low. Given the large relative moves in PFE, option prices are still cheap on a short term basis.
Six-month PFE with daily candles up top. Ten-day historical vol and 30-day implied vol on bottom.
I dont think recent highs are too far a stretch at this point.
The US government wants people vaccinated and PFE is still the big global production horse. Plus, the FDA also approved the vaccine for wide use on Friday after the close.
Option IVs are in the low-30s,with realized vol in PFE closer to 40%.
PFE does not normally trade like that, as you can see from the vol charts. August has been one of those rare occurrences during which IV is relatively low.
The Oct. call cycle still looks like a good purchase. See you Monday.
To Your Trading Success,
AG
