Looking back to 14 days ago, XPO Logistics (XPO) priced a 15,000,000 share secondary stock offering at $25.00 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 Thursday, the stock is now 6.8% above the offering price.Investors who did not participate in the offering but would be a buyer of XPO 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 August put at the $22.50 strike, which has a bid at the time of this writing of $1.25. That would result in a cost basis of $21.25 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 5.6% return against the $22.50 purchase commitment, or a 11% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy XPO at a 23% Discount
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