Wednesday, October 07, 2009

Equity put option written

The last equity put option written against the Hong Kong Tracker fund expired last week. I delayed rolling the contract over to provide some additional financing on the new property purchase should it be necessary. As the extra financing was not needed, this morning I entered into a new contract, selecting Petro China (857) as the underlying stock.

Details are as follows:

Underlying: Petro China (857)
Market price: $9.13
Strike price: $8.96
Valuation date: 5 November, 2009
Maturity date: 11 November, 2009
Implied yield: 16.80%
Net purchase price if exercised: $8.84

If I get hit I will have effectively purchased the shares at about a 3.2% discount to the prevailing market price. This is a share which I am happy to hold long term if I get hit.
Posted by traineeinvestor

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