I am recommending we buy back our Pfizer (PFE) put.
The stock is rallying today on fears about the Omicron coronavirus variant. However, Moderna’s (MRNA) CEO is warning that COVID-19 vaccines are unlikely to be as effective against the new variant, prompting a sell-off in MRNA. Pfizer and Moderna use very similar technologies for their COVID-19 vaccines, so a sell-off in PFE is not out of the question, especially if Pfizer’s CEO makes a similar statement.
Therefore, I want to lock in a large portion of the premium we generated with our previous roll by closing now and taking a pause. We will sell another put on PFE once things calm down a bit to continue our position in this core stock.
Current Stock Price: $53.77
Net Debit: $1.49
Action: Buy to close PFE Dec Week One (12/3) 50 Put
Current Option Price: $0.07-$0.08
Recommended Limit: Set your initial limit order at $0.08, but adjust as needed to close the position today
New Net Debit: $1.57
Potential Rate of Return: I am targeting breakeven for this position