Investors eyeing a purchase of Rackspace Hosting Inc (NYSE: RAX) stock, but tentative about paying the going market price of $45.87/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2017 put at the $28 strike, which has a bid at the time of this writing of $1.75. Collecting that bid as the premium represents a 6.2% return against the $28 commitment, or a 3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Source: Markets