Markets Hit Record Highs. Investment Review №325

Investment Rationale

Philip Morris International (NYSE: PM) is one of the world's largest tobacco manufacturers and a leader in transforming the industry toward smoke-free technologies. The company is actively expanding its portfolio of innovative products such as IQOS, ZYN, and VEEV, which now account for over 40% of its revenue. Philip Morris continues to adapt its business to evolving regulatory requirements and shifting consumer demand, reducing its reliance on traditional cigarettes while strengthening its presence in the U.S., Europe, and Asia.

Buying a call option with a $160 strike offers an opportunity to profit from a potential rebound in Philip Morris stock following what appears to be an excessively negative market reaction to the quarterly earnings report released on July 22. Since the report, the stock has dropped by more than 10%, reaching its 200-day moving average, while the RSI(14) has fallen below 20, signaling deep oversold conditions. Meanwhile, the company’s fundamentals remain solid, and option volatility is at a moderate level (IV ≈ 22%), making this a compelling tactical bullish strategy with limited downside risk.

Strategy	Long Call
Ticker of the Underlying	PM
Recommendation	BUY
Strike and Option Type	Call $165
Expiration Date	19.09.2025
Current Price (Mid)	5,000
Strategy Cost	$500,00
Greek Parameters	Delta – 0,481 Gamma – 0,029 Vega — 0,247 Theta – -0,062
Implied Volatility	22,65%
Realized	1М – 36,64% 3М – 26,48% 6М – 29,83% 12М – 27,09%

 

P/L of the option strategy

Trade Parameters

Position Management

If, on the September 19, 2025 expiration date, the underlying stock price is above $165 but below $170, the investor will incur a partial loss. If the stock price remains below $165, the maximum potential loss is $500. If the price exceeds the breakeven point of $170, the upside is theoretically unlimited; however, we recommend closing the position if the call option’s value reaches $900.