There were 9 stocks on the watch list for today. Here is a trade from that watch list.
Pfizer Stock (PFE)
In the March pandemic panic, Pfizer Stock (PFE) fell to just below $30.
Today’s market plunge sent the stock down to $35.45 but it pushed up put premiums at lower put strikes. For my portfolio, this is a chance to sell put options down at prior lows but for exceptional profits.
Trade 1:
Sold 5 put contracts for Dec 18 expiry at the $32 put strike for $0.90 near the close today, and bought 5 put contracts at the $28 put strike for 19 cents forming a $4.00 credit put spread returning a huge 17.7% return if held to expiry.
If the stock falls below $32 my break-even cost is at $31.29. I will probably buy back the $32 put strike and roll out into January but probably stay at $32 and keep rolling until the stock recovers.
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. You always trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. The author assumes no liability for your investment decisions. Read the full disclaimer.