Looking back to 56 days ago, Advanced Emissions Solutions (ADES) priced a 600,000 share secondary stock offering at $45.00 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 Friday, the stock is now 15.2% higher than the offering price.Investors who did not participate in the offering but would be a buyer of ADES 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 July put at the $40 strike, which has a bid at the time of this writing of $1.95. That would result in a cost basis of $38.05 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 4.9% return against the $40.00 purchase commitment, or a 9.4% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy ADES at a 28% Discount
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