Two of the equity put options I wrote last month expired unexercised. Once again, I have rolled the contracts forward for another month using the same underlying stocks. However. I have been less aggressive and used strike prices a bit further out of the money and accepted smaller option premiums as a result.
Details are as follows:
Contract #1
Underlying: Hutchison Whampoa (13)
Market price: $56.30
Strike price: $53.50
Valuation date: 25 August
Maturity date: 27 August
Implied yield: 11.32%
Net purchase price if exercised: $53.00
Contract #2
Underlying: China Construction Bank (939)
Market price: $6.15
Strike price: $5.85
Valuation date: 25 August
Maturity date: 27 August
Implied yield: 16.2%
Net purchase price if exercised: $5.78
Both are stocks I would be comfortable purchasing at these prices. If I get hit I will have effectively purchased the shares at about a 5.9% (HWL) or 6.1% (CCB) discount to the prevailing market prices.
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