Today we assumed a very short term (5 day) position in Pfizer (PFE). So far that position has already achieved a 25% return on risk – it’s basis is in call options. After a mild earnings beat this morning (0.69/share vs estimated 0.67) PFE stock dropped 0.50 due to lower than expected actual revenue. When that sudden drop occurred the pricing mechanism for put options dropped in the money contracts to a near-discounted model. During that sudden drop we acquired as much as we felt was safe, and expect to profit as long as the drop doesn’t continue (which it very definitely will not). This position is already profitable as-is, but we intend to wait a few days on the assumption that the price should at least normalize, and may even rise (after all they did beat earnings, and revenue didn’t miss by that much).