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February 18, 2005
Pfizer, Friday, Feb 18, 2005 17:05:34
Do you recall my Trader Wizard November 14 Recommendation to Accumulate Pfizer (NYSE: PFE) when it was at $27.45? You can review my report for the reasons I liked PFE, but I'd like to point out that I also recommended a Jun-05 27.50 put write to take in a premium of $2.35, as well as to buy the Jan-05 30.00 calls at a cost of $0.65.
Today PFE closed at $26.80, down "2.4 percent in the past 14 weeks, but likely to rally strongly next week.
The chart indicates I was wrong on PFE, because it continued to sell down after Nov 14, and the Jan 30 calls closed worthless, giving up $0.65 premium. However, the short put closed today at $1.70, so my P&L position is now zero (i.e., +$2.35 -$1.70-$-.65).
But the short put is still open, so as bad as my trade got, I still expect to make a good percentage profit on it. I've got til June.
No ka-ching on this one, so far, but not bad after all.
But, I'll ring the bell on this one too. Just watch.
Posted by Posted by Bill Cara on February 18, 2005 05:01:42 PM | Category: 35 Health Care , U.S. Dow 30