Looking back to 153 days ago, Insmed (INSM) priced a 6,000,000 share secondary stock offering at $10.40 per share. Buyers in that offering made a considerable investment into the company, expecting that their investment would go up over the course of time and based on early trading on Tuesday, the stock is now 45% above the offering price.Investors who did not participate in the offering but would be a buyer of INSM at a cheaper price, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the March 2014 put at the $10 strike, which has a bid at the time of this writing of $1.25. That would result in a cost basis of $8.75 per share before broker commissions in the scenario where the contract is exercised. If the contract is never exercised, the put seller would still keep the premium, which represents a 12.5% return against the $10.00 purchase commitment, or a 48% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy INSM at a 42% Discount
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