Looking back to 99 days ago, InterMune (ITMN) priced a 6,500,000 share secondary stock offering at $13.00 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 Wednesday, the stock is now 6.1% higher than the offering price.Investors who did not participate in the offering but would be a buyer of ITMN 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 May put at the $12 strike, which has a bid at the time of this writing of $3.65. That would result in a cost basis of $8.35 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 30.4% return against the $12.00 purchase commitment, or a 118.2% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy ITMN at a 40% Discount
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