CSP on PFE

Given MRNA ER miss today, I'm looking back at PFE for a long-term hold given a 6.5% dividend.  PFE is near its 52-week low, and currently the Apr 17 25 PUTS have an IV of 22%.

Based on historical data analysis, PFE typically maintains an implied volatility in the mid to high 20s range, with:

• Average IV around 27-28%
• Recent range of roughly 25-30%

This is relatively moderate IV for a large pharmaceutical company, reflecting PFE's status as an established blue-chip stock while accounting for some sector-specific volatility from drug trial results and regulatory decisions.

Compared to other pharmaceutical companies, this is on the lower end, as smaller biotech companies often trade with IVs of 50%+ due to their more binary outcome nature (drug success/failure).

If you're considering selling puts on PFE, this IV level suggests moderate premium income - not as high as more volatile stocks but typically enough to generate meaningful premium while having lower risk of large adverse moves.

Based on the available information, there are several potential catalyst events that may impact Pfizer's (PFE) stock price over the next 60 days:

1. Announcement of New Chief Scientific Officer: Pfizer is nearing completion of its search for a new CSO, with an announcement expected soon. This leadership change could influence investor sentiment.

2. Earnings Announcement: Pfizer has an earnings announcement scheduled for April 29, 2025. This event typically impacts stock prices as investors react to the company's financial performance and future outlook.

3. Dividend Payment: Pfizer is expected to pay a dividend of $0.430 per share on March 7, 2025. While this is a regular event, it may still affect short-term trading patterns.

4. GLP-1 Program Updates: Any news regarding Pfizer's once-daily formulation of danuglipron (oral GLP-1) could impact the stock price, as investors are closely watching developments in this area3.

It's important to note that the stock's performance may also be influenced by broader market trends, industry developments, and unforeseen events not mentioned in the search results.

Lyft

After strong ER last night I’m going long on Lyft this morning with 2026 15 calls.  Boa maintains but at 17 target.  Buyback is a good thing.

CRSP Earnings Beat

CRISPR Therapeutics (CRSP) reported impressive Q4 2024 earnings today, beating analyst estimates. The company posted earnings of -$0.44 per share, surpassing the consensus estimate of -$1.15 by $0.71. This significant beat demonstrates the company's strong financial performance and operational efficiency.

Key highlights from the earnings report include:

• Revenue of $35.7 million for Q4 2024
• R&D expenses decreased to $82.2 million from $95.1 million in Q4 2023
• Strong cash position with $1.9 billion in cash and equivalents as of December 31, 2024

The company's CASGEVY® treatment continues to gain momentum, with over 50 authorized treatment centers activated globally and more than 50 patients having cells collected across all regions by the end of 2024.CRISPR Therapeutics is poised for a catalyst-rich 2025, with several key updates expected across its pipeline, including:

• Updates on lead in vivo cardiovascular programs in the first half of 2025
• A broad update on CTX112 in oncology and autoimmune diseases in mid-2025
• Ongoing clinical trials for next-generation CAR T products CTX112™ and CTX131™
• Progress on in vivo gene editing candidates CTX310™ and CTX320™

Despite the earnings beat, CRISPR Therapeutics traded up only slightly, reaching $39.62 on Tuesday and broke 40 in after-hours trading.

Nuclear Power was My Trade of the Month

Too bad I didn’t take my own advice…. I’ll craft a post on the energy need for AI and Cryptocurrency mining, let alone the rest of us who still like power running to our homes.  These companies are a bit off from certification to run a small nuclear power plant in your local neighborhood but the big companies in AI are already funding some of them.  

On the Amazon earnings call power was a significant mention for growth.  All those data centers and the compute power needed to churn on all that data...

Oklo and the entire Nuclear Power Watchlist, but Oklo specifically doubled from when I mentioned it last month.

         

How to Recover From a Bad Trade (Yes, My MRNA 36.50 PUTS will be assigned)

Fortunately, I did close my 35.50's for a good gain which already offsets the unrealized-loss I'll have in MRNA come Monday morning.  MRNA still has good volatility so I will be selling covered calls Monday as well, or maybe wait for a brief bounce to capture more premium.  MRNA has weekly calls so I should recover quickly.  

However, there are some significant catalysts that could prove to be strong headwinds.  States trying to legislate against mRNA vaccines, Earning on the 14th and the RFK Jr confirmation.  In the end this will probably be a net-0 or slight loss but proves as good reminder to look at the bigger picture and the macro environment.  Yes, one of my rules, but sometimes I get G-Locked as well.

Recovering from a significant trading loss can be a daunting challenge, but options strategies, particularly covered calls, offer a potential path to recoup losses and rebuild your portfolio. Let us explore how this approach can help traders bounce back from setbacks.

Understanding Covered Calls

A covered call is an options strategy where an investor owns shares of a stock and sells call options against those shares1. This approach can generate income through option premiums while potentially reducing the overall risk of the position. Here is how it works:

1. You own 100 shares of stock.
2. You sell a call option on those shares, giving the buyer the right to purchase your shares at a specific price (strike price) before a certain date (expiration)
3. You collect a premium for selling this option.

Using Covered Calls to Recover Losses

When you've experienced a loss in a stock position, covered calls can be an effective recovery strategy:

1. Generate Income: By selling call options against your existing shares, you can collect premiums that offset some of your losses3.
2. Lower Your Break-Even Point: The premiums you receive effectively reduce your cost basis in the stock, lowering the price at which you break even6.
3. Limit Further Downside: While covered calls don't protect against all downside risk, the premium received does provide a small buffer against further losses1.

Implementing the Strategy

To use covered calls for recovery:

1. Analyze Your Position: Determine the magnitude of your unrealized loss. For example, if you bought a stock at $40 and it's now at $30, your paper loss is $10 per share6.
2. Choose Your Strike Price: Select a strike price that balances potential upside with premium income. A common approach is to choose a strike price above the current stock price by half of your loss6.
3. Select an Expiration Date: Longer-dated options typically offer higher premiums but limit your flexibility. Choose an expiration that aligns with your recovery timeline.
4. Execute the Trade: Sell one call option contract for every 100 shares you own.

Example Scenario

Let's say you bought 100 shares of XYZ stock at $50, but it's now trading at $40. Your unrealized loss is $1,000. You could:

1. Sell a covered call with a $45 strike price (halfway between your purchase price and current price)
2. Collect a premium of, say, $2 per share ($200 total)
3. If the stock rises above $45 by expiration, your shares will be called away, but you'll have recovered $700 from your loss ($500 from stock appreciation + $200 from the premium)
4. If the stock remains below $45, you keep the $200 premium, reducing your effective loss to $800.

Risks and Considerations

While covered calls can aid in recovery, they are not without risks:

• Capped Upside: If the stock price surges above your strike price, your gains are limited3.
• Continued Downside Risk: You are still exposed to potential further declines in the stock price.
• Assignment Risk: The option buyer may exercise their right to purchase your shares at any time before expiration.

Conclusion

Covered calls offer a strategic approach to recovering from trading losses. By generating income and potentially lowering your break-even point, this options strategy can help you rebuild your portfolio more efficiently than simply holding and hoping for a recovery. However, it's crucial to understand the mechanics and risks involved before implementing this or any options strategy. Remember, successful trading isn't about avoiding all losses, it's about managing risk and having strategies to recover when setbacks occur. As you navigate the path to recovery, consider keeping a detailed trade log to learn from your experiences and refine your approach over time.