Looking back to 111 days ago, Matador Resources (MTDR) priced a 8,500,000 share secondary stock offering at $15.25 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 Tuesday, the stock is now 24.9% above the offering price.Investors who did not participate in the offering but would be a buyer of MTDR 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 June 2014 put at the $15 strike, which has a bid at the time of this writing of 70 cents. That would result in a cost basis of $14.30 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 4.7% return against the $15.00 purchase commitment, or a 9.5% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy MTDR at a 25% Discount
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