Wednesday, July 15, 2009

Equity put option written

The equity put option I wrote last month against Sinopec (386) matured today without being exercised against me. This morning I wrote a new put option against the Hong Kong Tracker fund (2800). Details are as follows:

Underlying: Hong Kong Tracker fund (2800)
Valuation Date: 13 August
Maturity Date: 17 August
Strike Price: $17.68
Market Price (at the time of writing the contract): $18.40
Implied Yield (annualised): 15.01%
Net Purchase Price (if exercised): $17.46
Discount to Market Price (if exercised): 5.1%

This is a more conservative investment than the previous three equity options written. The reason for the more conservative approach is that the options I wrote against Hutchison Whampoa (13) and China Construction Bank (939) which have a valuation date on 23 July are both in the money at the moment.

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