Pfizer Options Traders Divided: Bull Put Spread vs. Long Straddle Strategy Showdown

Two Contrasting Tactics Emerge as Traders Reassess PFE Positioning

Pfizer (PFE) has become a focal point for options strategists this month, with traders deploying distinctly different approaches to navigate the pharmaceutical giant’s recent weakness. While the stock languishes near $25.43—down 59% from its 2021 peak of $61.71—savvy options traders are splitting into two camps. Some are betting on volatility through a Long Straddle, while others are taking a more conservative stance using a bull put spread. Both strategies hinge on the March 20 expiration cycle, specifically around the $29 strike.

Understanding the Setup: Why $29 Matters

Recent options data reveals significant activity clustering around Pfizer’s March 20 contracts. The $29 put option recorded a volume-to-open-interest (Vol/OI) ratio of 210.16—an exceptional reading that dominated the broader market and exceeded Alphabet’s (GOOG) next-most-active option by 35%. This concentration signals a coordinated positioning, with 30,263 contracts traded against just 144 in open interest.

Pfizer’s typical 30-day options volume averages 142,695 contracts. Yesterday’s spike reached 1.39 times this baseline, marking the most active session since mid-December. While still below the 890,898-contract peak recorded after Q3 2025 earnings in early November, the fresh surge indicates renewed trader interest following Pfizer’s December 16 guidance reaffirmation.

The company reconfirmed its 2025 outlook while projecting 2026 adjusted earnings per share at $2.90 midpoint—down from $3.08 in 2025. Post-announcement weakness has confined the stock to a $25 to $25.50 trading band, creating the conditions these strategies are designed to exploit.

Strategy One: The Long Straddle—Betting on Volatility Without Direction

The Long Straddle pairs a March 20 $29 call and $29 put into a single wager on price movement magnitude, not direction. Traders deploy this when expecting volatility to expand beyond historical patterns.

The cost structure is straightforward: a net debit of $4.38 per share ($438 per contract) establishes breakeven points at $24.62 (downside) and $33.38 (upside). With 71 days to expiration, the timeframe sits comfortably within the optimal 30-45 day window—long enough for material moves yet short enough to minimize time decay erosion.

Probability analysis reveals the setup’s asymmetry. The expected move of 6.96% makes reaching the downside breakeven more probable than the upside equivalent. If Pfizer advances by the anticipated $1.76, landing at $27.05, the call expires worthless while the put generates $89 in profit. Conversely, an equivalent downside move to $23.53 yields $109 profit using the $29 strikes.

That $109 gain annualizes to a 128% return ($109 ÷ $438 × 365 ÷ 71), representing solid compensation for a 37% win probability. The straddle appeals to traders expecting heightened volatility regardless of direction, though the odds require the stock to clear $31.58 or drop below $24.42 for profitability.

Strategy Two: The Bull Put Spread—Conservative Income Generation

Where the straddle remains direction-neutral, the bull put spread takes an explicitly bullish stance. Traders execute this by selling the $29 put while simultaneously buying the $26 put as downside insurance.

The premium mechanics are compelling: selling the $29 put generates $390 in income, while purchasing the $26 protective put costs $156, netting $234 in immediate credit to the trader’s account. Maximum risk caps at $66—the $3 width between strikes minus the credit received.

This skewed risk-reward profile delivers remarkable returns. A 354.55% profit materializes if Pfizer closes above $29 at expiration, or 1,848.73% annualized. The breakeven sits at $26.66, merely 4.84% above the current price. Given Pfizer’s expected 6.96% move in either direction, profitable scenarios materialize whenever the stock finishes between $26.66 and $29—a mathematically favorable outcome despite roughly 1-in-3 win probability.

The Comparative Advantage: Risk-Adjusted Returns

The bull put spread’s risk-to-reward ratio of 0.28-to-1 fundamentally differs from the straddle’s symmetric structure. For every $100 in profit potential, the bull put spread risks just $28, appealing to conservative positioning within Pfizer’s current uncertainty.

Traders optimistic about pharmaceutical sector stabilization increasingly favor the spread’s defined-risk architecture over the straddle’s volatility dependency. With Pfizer’s market capitalization at $144 billion and forward guidance flagging earnings compression, the bull put spread’s lower barrier to profitability offers practical advantage.

Both strategies exploit the March 20 expiration window across the 71-day timeframe, yet serve distinct trader temperaments. The Long Straddle extracts value from volatility expansion, rewarding large directional moves. The bull put spread monetizes modest recovery, requiring only marginal upside to achieve maximum profit. For options traders recalibrating Pfizer exposure, this divergence in tactical approaches reflects broader market debate: Is PFE stabilizing, or does downside risk remain elevated? The options market’s positioning suggests traders are hedging both scenarios simultaneously.