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American Capital Agency Corp. Message Board

  • olee2116 olee2116 Apr 3, 2012 2:03 PM Flag

    Nice AGNC is on the way up

    but what about it's little brother MTGE... Still trading under the price it was SPO day.

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    • You're welcome Slegemark,

      I am heavily invested(options)in seeing MTGE succeed. The potential is stellar. May, should see the beginning of the break up toward an early(?) June EX. I see the potential @ EX @ 22.75-24.50. That is a broad range, so trade accordingly.

      My favorite, so far, are the Jun20Calls offset with Short May22.50Puts. I got this for a .9 debit, meaning my BE is 21.79 @ May OPEX, which means pretty much where we are now.

      The sweet part about this trade(I'm still learning the hard way), is that the PUTS expire @ May OPEX, which is B4 the EX run. So if we are close to 22.50 by the May OPEX, the Puts expire worthless and you have the Jun20Calls for .90 instead of 2.20, giving you another 1.30 profit on your run up to EX.

      The extra sweet part is that if the PPS is the same at May OPEX as today(21.79) I pay a penalty of 71 cents(22.50 - 21.79), so my investment for those Jun20Calls that remain is my original .9 debit + .71 or 1.61. Still beats 2.20(today's price) and that is if the stock doesn't go up a penny from today.

      Before I was Shorting the next months Puts(June in this case), but the time premium remaining at EX, chewed into my profits. By allowing the Puts to expire as close as possible BEFORE EX, takes their time premium out of the equation.

      Of course, if the PPS moves against me I can lose. That is why I would only do this on a stock I wouldn't mind owning.

      Just another "tool" in the tool kit to think about. Good luck!

      DocReits

    • It is 9.16+ 0.80 + = 9.96 If sold at peak just before x-div, then .90 divy did not go with the gain. But, caveat, how many shares traded above 24? not enough to create a profit taking effect.

      Lots of mREITs out there to chose from and I gather that AGNC is the narrow consensus leader.

      Man, those MTGE June calls really jumped today without any price movement.


      Regardless, it is much more fun than Vegas. Thanks Doc , for getting me started.
      sleg

    • Thanks nerd.

    • No offense but, with all the shares in every SPO, exactly how much impact do you you think the members of this board can have on share price. Many here stopped buying shares and started trading options. My thoughts, Not all that much, It's general sentiment.

      Last run to Ex many here jumped out and Price kept moving up even without them.

    • yourbestfriendintheworld yourbestfriendintheworld Apr 4, 2012 12:49 PM Flag

      >but you all keep siphoning funds away from it to go to MTGE (and others).

      Hint: so is ACAS.

    • I think people are still digesting the rapid rise from 10 to 20 in MTGE. Profit takers may be satisfied that it's not going to double on them any time soon, even if its div does.

 
AGNC
23.51+0.120(+0.51%)3:27 PMEDT

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