Wednesday, August 19, 2009

Equity Put Option Written

Last month's equity put option over the Hong Kong Tracker fund (2800) expired unexercised.

Once again, I have rolled the contract forward for another month, this time using China Construction Bank (939) rather than the Tracker fund. However. I have been less aggressive and used a strike price a bit further out of the money and accepted a smaller option premium as a result. The reason for using a specific stock is that the premium offered was materially higher than the premium on the Tracker fund.

Details are as follows:

Underlying: China Construction Bank (13)
Market price: $5.81
Strike price: $5.47
Valuation date: 17 September
Maturity date: 21 September
Implied yield: 10.24%
Net purchase price if exercised: $5.43

If I get hit I will have effectively purchased the shares at about a 6.5% discount to the prevailing market price.

4 comments:

Unknown said...

I've just found your blog. Think it's great - it doesn't seem that there are a lot of people in HK writing about this topic (to my knowledge anyway).

I have subscribed and look forward to going through your old posts.

Andrew

traineeinvestor said...

Hi Andrew

Thanks for dropping by.

I'm not aware of any other financial bloggers from HK????

Comments and feedback are always welcome - its one way to learn more.

Cheers
traineeinvestor

Unknown said...

Hi traineeinvestor,

I've got a number of questions that I wouldn't mind asking directly - if you would be willing to answer them.

Understand if you don't.

Can you get my email address from the comments and maybe we can have an email conversation?

Thanks,

Andrew

traineeinvestor said...

Hi Andrew

Happy to have an e-mail conversation but I was not able to retrieve your e-mail address. Mine is traineeinvestor [at] gmail [dot] com

cheers