Impax Laboratories (NASDAQ:$IPXL) currently has a going rate of $20.75 per share. This could be a shaky proposition for some investors. However, there may be another way to get in on the drug manufacturer’s stock. So you have to ask yourself, is Impax Laboratories a buy at $16?

The stock currently has a put contract issued for March 2018. The put strike is $16, which currently has a bid of 95 cents. A collection of the bid as a premium would represent a 5.9% return based on the $16 commitment. Alternatively, it would represent a 14.1% annualized rate of return.

However, selling a put does not carry the exact same benefits as actually owning the stock. For example, selling the put would not result in access to the stock’s upside in the same way that selling the share itself would. More importantly, the person on the other side would only benefit from exercising the contract at the $16 strike if doing so produced a better outcome than selling at the current price.

What this means is that if Impax Laboratories shares fall 22.8% and the put is exercised, the only upside to the put seller is collecting the premium for the 14.1% annualized rate of return, with a resulting cost basis of $15.05 before subtracting broker commissions and the 95 cent bid.

Impax currently has a trailing 12-month volatility of approximately 84%.

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