"if you short MTGE...you pay the dividend as you hold short.....
Not a smart short play"
It surely has been a very smart short play for the last 2 months (and a terrible one for the 5 years before that).
The issue is what will happen from here. The market has surely overshot the rate change so far. It (the market) is saying there will be significant rate increases in the near future. It has actually been saying that for awhile now, and has been very right. My bet is that it will continue to be right for the foreseeable future. I have been interested in buying REM for a couple months (with proceeds fro the sale of a REIT). So far I have been right to postpone the trade. The REIT is down (~8% from the high), but REM is down much more ( 20%). I will probably wait a month or two more before pulling the trigger. I am also going to buy some BCDL, the leveraged BDC ETF. Total purchases will be small % of total portfolio (the fixed income portion, since I generally hate fixed income, unless I can get an equity type of return).