Bank of Communications Put Option

I wrote some put options on BCM (stock code 3328) yesterday with a strike price of $9.

Reason for Entry:

Fundamental analysis
I always love banking stock, most of them are very profitable. For BCM it shown consistent earnings and acceptable ROE and Net profit margin both 15% and 30% respectively. Although the dividend yield is not that great only about 1.6% p.a. if I buy the share at $9. But still it is a good company I don't mind buying.

Technical analysis
Over the last 4 months, 3328 has been in a trading range of $9-10. It shown good support at $9. On the weekly chart, the current price is very close to the 30 week EMA which mean relatively good value.

Action: Write to Open BCM PUT DEC 09 with strike $9 and premium of $0.24.
Actually today premium is even better with a range of $0.29-0.32 despite the share price going up. Today will be a even better day to open this position.


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