Monday, November 09, 2009

Equity put option written

With my previous put option against Petro China maturing today, I rolled over for another month selecting China Construction Bank (939) as the underlying. CCB was picked as a stock I would be happy to own at these prices for the longer term.

Here are the details:

Underlying: China Construction Bank (939)
Market price: $6.91
Strike price: $6.71
Valuation date: 7 December, 2009
Maturity date: 9 December, 2009Implied yield: 13.55%
Net purchase price if exercised: $6.64

If I get hit I will have effectively purchased the shares at about a 3.9% discount to the prevailing market price. This is a share which I am happy to hold long term if I get hit.

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