Looking back to 91 days ago, LaSalle Hotel Properties (LHO) priced a 6,700,000 share secondary stock offering at $30.05 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 Tuesday, the stock is now 5.3% higher than the offering price. It should be noted that investors at the secondary have collected $0.28/share in dividends since the time of their purchase, so they are currently up 6.2% on their purchase from a total return basis.Investors who did not participate in the offering but would be a buyer of LHO 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 $30 strike, which has a bid at the time of this writing of $1.25. That would result in a cost basis of $28.75 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 4.2% return against the $30.00 purchase commitment, or a 10.1% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy LHO at a 9% Discount
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