Rare opportunity for a cheap trade on Pfizer

We've been watching Pfizer from the sidelines as the stock slid the past two months from $44.50 to a bottom of $34. Currently trading at $35.50 Pfizer represents an opportunity that's hard to pass up. Investors and traders both have options and we're going to highlight here and believe will pay off well. Sporting a dividend yield of just over 4% the stock is attractive for long term investors amid a market that has been volatile.

However, the better trade here that we see is a spread on the options to generate a more cost-effective return if the stock moves higher, and to potentially pick up the stock at cheaper levels should we get the timing wrong and it continues to move lower.

We are selling the December $32 Puts which expire in 112 days for $0.67, and also buying the same month $38 Calls for $0.68. Yes, you read that right, with the stock trading at $35.50 which is dead in the middle of the $32 Put and the $38 Call the market is pricing the up/down side equally so we're able to put this trade on for effectively $1 per set of options. We see this as a very strong value proposition that gives us long exposure to Pfizer if it moves higher for almost free, and if the stock drops below $32, we'll pick up the shares at that level which is 10% lower than it's current price.