Pfizer (PFE) – Hedged Covered Call Income CampaignAfter Pfizer’s return to price levels closer to its pre-COVID range, I personally believe the stock is undervalued relative to its current earnings profile and long-term potential. This view is also influenced by Pfizer’s recent acquisition of Metsera, which brings a pipeline of obesity and cardiometabolic candidates — including GLP-1 receptor agonists, an amylin analog, and other metabolic therapies.
Whether this pipeline ultimately succeeds is uncertain, but in my opinion, it meaningfully strengthens Pfizer’s long-term outlook.
This campaign is structured as a hedged, conservative covered-call income strategy, combining downside protection with steady premium generation.
Current Position
1. Long Shares: 700 shares @ $24.94
2. Protective Long Puts: 7 puts @ $19 strike (exp. 1/16/26), Cost: $35 total
Because PFE’s implied volatility is relatively low, these long-dated puts provide very inexpensive downside protection, defining maximum risk and allowing me to run covered calls with confidence. This is my preferred way to reduce tail risk on slower-moving stocks.
Covered Calls (Income)
I am selling near-term calls at the $25 strike and rolling as needed.
Call Activity So Far:
A. Initial Sell
• 7 contracts @ $0.11 → $77 total
• Expiration: 11/07/2025
B. Roll #1
• 7 contracts @ $0.15 → $105 total
• Expiration: 11/11/2025
C. Roll #2
• 7 contracts @ $0.15 → $105 total
• Expiration: 11/17/2025
Dividend Component:
Pfizer’s dividend provides a third income source that complements the weekly call premiums. With 700 shares, my next scheduled dividend payment is $310.89 on December 1st. this is nearly a 7% yield.
Dividends enhance this strategy by:
1. Reducing effective cost basis over time
2. Providing a reliable quarterly income
3. Making slower-moving stocks like PFE well-suited for hedged income trading
4. Smoothing returns even during flat price periods
This is one reason I favor PFE for long-term defensive income strategies.
These rolls follow my usual “roll out only” approach — extending time value without paying unnecessary extrinsic premium. This keeps weekly income stable while managing assignment risk.
