Both the short strangle and the short straddle strategies employed on Pfizer today indicate investors expect volatility in the price of the underlying shares to decline going forward.

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To construct a short strangle, the trader sells an equal number of out-of-the-money puts and calls with the same expiration.

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The July and August contracts saw heaviest volume at the 42.5 call and 37.5 strikes, which may well have been the implementation of short strangle trades, in which investors sell equal amounts of calls and puts.

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