Looking back to 178 days ago, PVR Partners LP (PVR) priced a 5,500,000 share secondary stock offering at $23.00 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 Monday, the stock is now 20% above the offering price. It should be noted that investors at the secondary have collected $1.10/share in dividends since the time of their purchase, so they are currently up 24.7% on their purchase from a total return basis.Investors who did not participate in the offering but would be a buyer of PVR 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 25 cents. That would result in a cost basis of $22.25 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 1.1% return against the $22.50 purchase commitment, or a 2.5% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For A Chance To Buy PVR At A 20% Discount
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