Commit To Purchase SM Energy At $40, Earn 6.1%

Investors eyeing a purchase of SM Energy Co. (NYSE: SM) shares, but tentative about paying the going market price of $64.25/share, 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 $40 strike, which has a bid at the time of this writing of $2.45. Collecting that bid as the premium represents a 6.1% return against the $40 commitment, or a 4% annualized rate of return (at Stock ...