Thursday, July 9, 2009

Trade - 7/9/09 - PFE

STO (2) Naked Put - PFE (Pfizer) Aug 09 @ $14 for $0.61 each. Net Premium $121.

I am starting to think that any O’bama plan will have little affect on the drug companies. If that is true then several drug companies are substantially under-valued. Also, I am trying to avoid discretionary spending type stocks right now.

Risk Management:

Ticker: PFE
Expiratoin: 21-Aug-09
Invest Date 09-Jul-09

Current Stock Price $14.30
Strike Price $14.00
Premium $0.61
Annual Dividend $0.64

Days to Expiration 43
Return (Assumes CSP) 4.36%
Annualized Return 36.99%
Downside Protection 6.36%
Effective Dividend if Put 4.78%

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