I bought some Pfizer LEAPS in late August/ early September when Pfizer stock was on a good uptrend momentum. Unfortunately, the stock price started falling in prices in September and so does the LEAPS premium.
In the mid-September period, I average down on these LEAPS, expiring in June and Sept 2022, upon news that US President Joe Biden was encouraging Americans to get a booster shot and that Pfizer vaccines would soon be available to vaccinate younger children from 5 to 11.
Further good news recently has helped to propel the stock higher in recent weeks, reaching a price near its all-time high. In mid-Nov, I decided to sell off my Pfizer LEAPS positions for 20% profits in less than 3 months.
There are a few reasons to sell, one of them would be that the LEAPS are expiring in June / September 2022. I will have to sell them off eventually.
The stock is also very volatile and it seems like all the future growth value has already been factored into the current share price. The good news does not seem to move the share price by a lot and there were days where the share price actually dropped when there was good news about the company.
Thus, I have decided not to risk my LEAPS contracts working against me when the share price plunges and the contract loses significant value. LEAPS work well for stock that will eventually go up, whether it is short-term or longer term.
However, with the volatility surrounding Pfizer and share price can plunge in a short period, just like what happened to another vaccine company Moderna, it may not be a good idea to buy LEAPS on Pfizer. I have freed up some capital from this sale and put them into more stable companies like the big tech or semi-conductors giants such as AMD and Nvidia.