Looking back to 55 days ago, Tesoro Logistics LP (TLLP) priced a 6,300,000 share secondary stock offering at $51.05 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 Monday, the stock is now 6.4% above the offering price.Investors who did not participate in the offering but would be a buyer of TLLP 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 put at the $50 strike, which has a bid at the time of this writing of $1.65. That would result in a cost basis of $48.35 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 3.3% return against the $50.00 purchase commitment, or a 7.6% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy TLLP at a 13% Discount
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