I was put 1000 shares of Pfizer Inc (PFE) back in March 2020. My entry price was $31.00 per share – over a 27% discount to Pfizer’s Fair Value of $42.50 per share – providing a comfortable Margin of Safety. Pfizer also pays a 4.19% dividend – so I actually have 1010.50 shares today.
The stock is now selling at $36.25 per share, due to some good news on the COVID-19 vaccine front:
I am probably wrong, but can’t help feeling the price is getting a little heavy up here, so I sold Calls on the initial 1000 shares on Friday and collected *$570.00 in premium – here is the trade:
- Sold ten (10) PFE Call Options
- Strike Price: $38.00
- Expiration Date: August 21, 2020
- *Payment Collected: $570.00
If PFE is trading under $38.00 per share on August 21, 2020 – I will keep the 1000 shares and the *$570.00 premium. If PFE is selling for over $38.00 per share on August 21, 2020 – I will lose my 1000 shares, but with a total profit of *$7,570.00.
Hopefully this works out – I think I am going to take the rest of the day off – too hot to do anything outside:
*Excludes transaction costs.
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