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American Capital Agency Corp. Message Board

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  • return5x return5x Aug 15, 2012 2:10 AM Flag

    AGNC options scoreboard:

    I jumped the gun and bought most of mine early the morning after SPO (should have waited later in the day when PPS dropped, or in the days following). I own 942 calls, ranging from Sept 34s to 14Mar30s, with a weighted avg breakeven of $34.91. The range of breakevens is $33.35 to $35.35; if we stall around $35, it will be tempting to sell everything out in order to at least book a net gain, but it would be less than $7k after commissions.

    On the other hand, maybe I'll just dump the Sept 34s at BE ($35.05) and hold the others to DBEX. Reduces my risk but still provides nice upside at $35.50-36.00 if we get there this quarter.

    If DBEX is AFTER the September OPEX, would it be prudent to create spreads as the PPS rises into Spetember? Say September 35s or 36s? I don't want to be short on DBEX, but if OPEX comes first that would be okay, right? If I got called I could cover with the longs and including premium from selling the short calls should be "close enough" to the high for the run that I wouldn't feel I left too much on the table. Makes sense?


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    • Sounds like you have it pretty well figured out 5x,

      You, like everyone and their brother will be reducing exposure/taking profits at 35.00. That will be a hard price to bridge. The problem with the short hedge is that you won't know when the EX will be until a few days before OPEX. By that time the Sept OTM Calls will be worthless.


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