Looking back to 65 days ago, New York Mortgage Trust Inc (NYMT) priced a 13,000,000 share secondary stock offering at $7.59 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% above the offering price.Investors who did not participate in the offering but would be a buyer of NYMT 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 January 2015 put at the $7.50 strike, which has a bid at the time of this writing of 50 cents. That would result in a cost basis of $7.00 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 6.7% return against the $7.50 purchase commitment, or a 10.8% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Use Options For a Chance To Buy NYMT at a 13% Discount
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