Looking back to 2 days ago, Keryx Biopharmaceuticals (KERX) priced a 6,900,000 share secondary stock offering at $14.50 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 5.1% higher than the offering price.Investors who did not participate in the offering but would be a buyer of KERX 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 $13 strike, which has a bid at the time of this writing of $2.15. That would result in a cost basis of $10.85 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 16.5% return against the $13.00 purchase commitment, or a 40.8% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy KERX at a 31% Discount
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