Uncommon Options Moves in Pfizer: 2 Tactics Traders Are Embracing

Unusual Options Surge for Pfizer: What Traders Need to Know

Recently, Pfizer (PFE) experienced a rare event in the options market. Its March 20 $29 put option topped the charts for unusual activity, boasting a volume-to-open-interest (Vol/OI) ratio of 210.16—outpacing the next most active option, Alphabet (GOOG), by 35%.

For investors hoping for a turnaround, Pfizer has been a challenging stock. Once a major beneficiary of the COVID-19 boom, its shares have since languished in the $20 range, falling 59% from their 2021 peak of $61.71. For those not already invested, finding a compelling reason to buy PFE is difficult.

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Options trading can offer unique opportunities in situations like this.

To illustrate, the March 20 $29 put saw a Vol/OI ratio of 210.16, with 30,263 contracts traded against an open interest of just 144. This signals a significant wager on Pfizer, which currently has a market capitalization of $144 billion.

Typically, I don’t focus on the stock with the highest Vol/OI ratio when analyzing unusual options activity. However, in this case, two strategies immediately stood out. Here’s why.

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The Options at Play

Beyond the March 20 $29 put, Pfizer also saw two other options with unusually high activity during the same session.

While these additional contracts also registered high Vol/OI ratios, the volume spike for the March 20 put was particularly notable. Interestingly, the $29 call with the same expiration date had a similar volume, suggesting the setup for a Long Straddle strategy, which I’ll discuss shortly.

Let’s first look at Pfizer’s options trading patterns.

On average, Pfizer’s 30-day options volume is 142,695 contracts. Yesterday’s activity was 1.39 times higher, marking the most active day since December 17. However, this still falls short of the three-month peak of 890,898 contracts, which occurred shortly after the company’s Q3 2025 earnings report on November 4. On the day of that report, options volume reached 376,442 contracts.

On December 16, Pfizer reaffirmed its 2025 outlook and shared a modest forecast for 2026, projecting adjusted earnings per share of $2.90 at the midpoint, down from $3.08 in 2025. The stock dropped for two days following this update, then mostly traded in a narrow band between $25 and $25.50.

Understanding the Long Straddle

As previously mentioned, the March 20 $29 put and call together form a Long Straddle strategy.

This approach is designed to profit from heightened volatility, regardless of whether the stock moves up or down. By holding both a call and a put, you can benefit if the share price at expiration lands above the upper breakeven or below the lower breakeven point.

For this trade, the net debit is $4.38, setting the breakeven prices at $33.38 (upside) and $24.62 (downside).

Here’s a visual representation of the $28 long straddle:

There’s a 38.1% probability that the stock will finish above $31.58 or below $24.42 at expiration. The chance of the $29 long straddle being profitable is about 37%, which isn’t particularly high.

One advantage is the 71 days remaining until expiration (DTE). Ideally, traders look for 30 to 45 days, which allows enough time for a significant move without excessive time decay.

You might wonder, “If I’m optimistic about Pfizer, why not just buy the call?” The reason is that with an expected move of 6.96%, the downside breakeven is more likely to be reached than the upside.

If the anticipated $1.76 move occurs, the stock would close at $27.05—well below the $31.58 call breakeven, rendering the call worthless. On the downside, the price would be $23.53, 3.6% below the $24.42 breakeven, resulting in an $89 profit. Using the $29 strikes, the gain would be $109, which annualizes to a 128.0% return [$109 / $438 net debit * 365 / 71].

That’s a respectable outcome.

Exploring the Bull Put Spread

The second strategy, the bull put spread, is a bullish play that anticipates the stock will rise. This involves selling the $29 put and buying a $26 put as protection.

Selling the $29 put brings in $390 in premium, while buying the $26 put costs $156, resulting in a net credit of $234. The maximum potential loss is $66, calculated as follows: [$29 short put strike - $26 long put strike] x 100 + $234 net credit.

This sets up a risk-to-reward ratio of 0.28 to 1, meaning you risk $28 for every $100 you could potentially earn. If the stock closes above $29 at expiration, you realize the full $234 profit—a 354.55% return, or 1,848.73% annualized.

While the probability of success is roughly one in three, the breakeven price of $26.66 is only 4.84% above the current share price of $25.43, with an expected move of 6.96% in either direction. Profits are possible if the stock finishes above $26.66 but below $29 at expiration.

Between these two strategies, the bull put spread is generally more suitable for investors seeking lower risk.