Still catching falling knives this week, today I sold options on Pfizer Inc (PFE) – the cheapest drug stock on my wish list.
Here is the trade:
- Sold: Ten (10) March 20, 2020 Puts
- Strike Price: $32.00
- *Premium Collected: $1.000.00
If I am forced to buy the 1000 shares, my entry price will be approx. $31.00 per share – over a 33% discount to Pfizer’s Fair Value of $46.00 per share – providing a comfortable Margin of Safety. Pfizer pays a 4.46% dividend – and will continue to do so unless Bernie get’s elected.
The nice thing about keeping a lot of money in cash and bonds, I get to go shopping for the cheapest high-quality stocks when everybody else is panicking. Still, wish I had waited on the BUD trade – And it’s gone!
*Excludes transaction costs.
Leave a Reply