PFE implied volatility is at one year high. The price of the 17.5 August 20 contracts are trading at 11 cents. How is this possible?
1) How is "what" possible? Be more specific. 2) The stock rallied slowly. The out-of-the-money calls (August 20's) are probably being sold with the expectation that the stock will remain below $20/share between now and expiration. Implied volatility levels will probably get crushed on price rallies. No big whoop.
i agree that IV will likely plummet after tomorrow, but @.11cents for strike that could move on earnings tomorrow and with IV@ a 1yr relative high? doesn't make sense to me. then again i haven't really followed the stock well enough to know if this normal pricing; i just see that there is about a 90% difference between the nearest ITm and OTM strikes.