Looking back to 69 days ago, Envestnet (ENV) priced a 5,045,215 share secondary stock offering at $29.25 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 Thursday, the stock is now 24.1% higher than the offering price.Investors who did not participate in the offering but would be a buyer of ENV 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 May 2014 put at the $25 strike, which has a bid at the time of this writing of 25 cents. That would result in a cost basis of $24.75 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 1% return against the $25.00 purchase commitment, or a 2.5% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy ENV at a 32% Discount
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