Tuesday, June 16, 2009

Equity put option written

One of my equity put options written against the Hong Kong Tracker fund (2800) expired yesterday.

As the valuation price was below the strike price, the option was not exercised and I pocketed the option premium.

As with the last roll over, I decided to be more aggressive and wrote a put option against a single stock rather an an index fund. In this case I selected Sinopec (386).

Details are below:

Underlying: Sinopec (386)
Market price: $5.84
Strike price: $5.58
Valuation date: 13 July
Maturity date: 15 July
Implied yield: 22.38%

If I get hit I will have effectively purchased the shares at about a 6.2% discount to the prevailing market price.

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