Commit To Purchase Theravance At $27, Earn 8.9%

Investors considering a purchase of Theravance Inc (NASD: THRX) stock, but tentative about paying the going market price of $41.91/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 $27 strike, which has a bid at the time of this writing of $2.40. Collecting that bid as the premium represents a 8.9% return against the $27 commitment, or a 6.8% annualized rate of return (...