Looking back to 62 days ago, WageWorks Inc ( WAGE) priced a 2,968,276 share secondary stock offering at $40.45 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 23.4% higher than the offering price.
Investors who did not participate in the offering but would be a buyer of WAGE 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 2014 put at the $40 strike, which has a bid at the time of this writing of $2.95. That would result in a cost basis of $37.05 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 7.4% return against the $40.00 purchase commitment, or a 12.5% annualized rate of return (at Stock Options Channel we call this the YieldBoost). START SLIDESHOW:
Top YieldBoost Puts of of Stocks with Recent Secondaries »