One of my equity put options written against the Hong Kong Tracker fund (2800) expired today. As the valuation price was below the strike price, the option was not exercised and I pocketed the option premium.
After spending a considerable amount of time doing research, I decided to be more aggressive and wrote put options against Hutchison Whampoa (13) and China Construction Bank (939). In addition, I selected strike prices that were slightly closer to the prevailing market prices than I have done with my previous contracts. Details are below:
Contract #1
Underlying: Hutchison Whampoa (13)
Market price: $50.55
Strike price: $48.65
Valuation date: 23 June
Maturity date: 25 June
Implied yield: 20.58%
Contract #2
Underlying: China Construction Bank (939)
Market price: $4.76
Strike price: $4.57
Valuation date: 23 June
Maturity date: 25 June
Implied yield: 16.548%
In both cases, if I get hit I will have effectively purchased the shares at about a 5% discount to the prevailing market prices.
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