Options Update: Merck and Pfizer volatility low into pending acquisitions

Posted Aug 27th 2009 8:00AM by Paul Foster
Filed under: Pfizer (PFE), Merck and Co (MRK), Options

Merck (NYSE: MRK) closed at $32.68. The Schering-Plough (NYSE: SGP) and Merck merger is expected to close before year end. SGP shareholders will receive 0.5767 shares and $10.50 in cash for each share of SGP. MRK October and January option implied volatility of 31 is below its 26-week average of 37, according to Track Data, suggesting decreasing price movement.

Pfizer (NYSE: PFE) closed at $16.77.Pfizer is expected to close on the acquisition of Wyeth (NYSE: WYE) for $33 in cash and 0.985 of a share of Pfizer by the end of 2009. PFE October option implied volatility is at 26, December is at 31; below its 26-week average of 36, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Tags: option implied volatility, OptionImpliedVolatility, pending acquisitions, PendingAcquisitions, Schering-Plough, Wyeth

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Reader Comments (Page 1 of 1)

9-07-2009 @ 6:26AM

nessie said...

hi Paul

how do you get the 26 week volatility average? and when you say "suggesting decreasing price movement." sre you meaning stock price or option value?