Pfizer + 2.5, %10, in Pre Market

Discussion in 'Options' started by Arnie Guitar, Dec 19, 2005.

  1. And HEAVY volume

    Their Lipitor patent was upheld.

    They've increased their dividend...............

    The sun is shining on them.

    And I was SO close to selling some puts last week,

    oh well..................:(
  2. Very little, to no, time premium on the Jan ITM calls.

    Interesting, there must be no confidence in this move.
  3. From the WSJ:

    Traders Get 11th-Hour Pfizer Move

    Traders who like to check out early on Friday might want to think twice about it -- at least during option's expiration week.

    Those who were around to react to late breaking news that a U.S. court ruled in favor of Pfizer Inc. in its Lipitor patent dispute could have exercised options that would have otherwise expired worthless.

    Pfizer's stock closed at $22.58 on Friday, which is below the threshold required by the Options Clearing Corp. to automatically exercise the December 22.50 calls. Because of this, these calls expired unless firms specifically requested that they be exercised. They have to do this by about 5:30 p.m. on the day of expiration.

    The news on Pfizer broke at about 10 minutes to five. That's too late for the stock markets, but gave options traders plenty of time to exercise those December 22.50 calls. Those who did, and sold the stock at its opening price of $25.15 on Monday, made a quick 12%.

    Of course brokerage firms have their own cut-off time for client orders -- typically 4:30 p.m. -- which means that only the pros could have gained in this way.
  4. dont


    why wouldn't I exercise. For 8c??

    I assume because it could open down more than that on Monday?

    I was checking IB and their cutoff is 16H30!

    Just thinking some people got off easy on their short calls!