Thursday, August 27, 2009

Equity put option written

Last month's equity put options written against China Construction Bank and Hutchison Whampoa expired unexercised.

I have rolled the money over into an equity put option against the Hong Kong Tracker fund (2800). Given current market conditions, I have gone with a conservative underlying and a relatively conservative price. Here are the details:

Underlying: Hong Kong Tracker fund (2800)
Market price: $20.60
Strike price: $19.58
Valuation date: 25 September
Maturity date: 28 September
Implied yield: 9.44%
Net purchase price if exercised: $19.43

In effect, if the option is exercised against me I will end up purchasing Hong Kong Tracker fund at a discount of 5.7% to the current market price.


Unknown said...

Hi Trainee,

I'm new to understanding a lot of this. I also invest in the HK Tracker fund, but have no idea what you're talking about in the post.

Could you help to explain what this is and what you're doing?


traineeinvestor said...

Hi Andrew

Sure. I'll do a couple of posts on options and warrants over the next few days.