Investors eyeing a purchase of Reynolds American Inc (RAI) stock, but cautious about paying the going market price of $49.28/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2015 put at the $40 strike, which has a bid at the time of this writing of $1.85. Collecting that bid as the premium represents a 4.6% return against the $40 commitment, or a 3.5% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Commit To Purchase Reynolds American At $40, Earn 4.6%
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