Looking back to 166 days ago, Resolute Energy Corp (REN) priced a 13,250,000 share secondary stock offering at $8.00 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 Tuesday, the stock is now 27.4% above the offering price.
Investors who did not participate in the offering but would be a buyer of REN 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 June 2014 put at the $7.50 strike, which has a bid at the time of this writing of 20 cents. That would result in a cost basis of $7.30 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 2.7% return against the $7.50 purchase commitment, or a 4% annualized rate of return (at Stock Options Channel we call this the YieldBoost). START SLIDESHOW:
Top YieldBoost Puts of of Stocks with Recent Secondaries »