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American Capital Agency Corp. Message Board

  • jim3089 jim3089 Oct 3, 2012 8:10 PM Flag

    ETP issues

    Judging that SUN holders will be liquidating their ETP units to be acquired this Friday, maybe its a good idea to ditch Nov. Calls until the smoke clears or replace it with a CPNO or other more favorable MLP? what do some on this board think?

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    • My original position was a spread where I sold the Oct 45 calls and bought the November 42.50's for an average cost basis of about $.98.

      Earlier, I rolled the Nov contracts down to 40's for a Oct 45/Nov 40 spread with a net 2.31 basis.

      Today. I rolled the Oct 45's down to Oct 42.50's for a net $.30 credit, making my average cost basis $2.01 in the new spread.

      My BE went from 43.48 (42.50+.98) to 42.31 (40.00+2.31) to 42.01 (40 + 2.01).

      I'm okay if we cross back above 42.50 at Oct OPEX and I have to sell for something close to a net $2.50. If we cross below 40, I might roll down to a lower spread while bringing the November leg into October if I can find something that's still profitable. But I will probably exit early for a loss or hang on & pray at that point. Oh well, live & learn. Won't be my first loss, or my last.

      My EPD Nov 52.50's will most likely make enough for me to come out ahead on the month.

    • nice AH action on ETP right now for all those people that held on

    • I predict a short squeeze. If the price dips to 41.37, the dividend hunters will push the price up. 43.86 by ex.

    • I'm looking at Kmp for an alternate,originally it was one of doc's choices.It looks like it had pretty consistent divi runs last year.I have a little ETP but it's looking risky near term so I might put a bid into KMP this morning.

    • I'm thinking about buying a few puts to hedge my calls and just holding on until the distribution. But I'd be interested in hearing what others are doing.

    • I didn't like ETP back when it was brought up a couple days ago, & I still don't like it. (personally) I like CPNO, but I won't chase gains.

      I am waiting for MSFT to give me a reason to buy into it. I bought into EPD, but again it is late and I don't suggest anyone buy into a run.

      Problem with CPNO is your basically gambling on the dividend at this point. The market is expecting a certain level of return. If it doesn't meet expectations it could fall to back when I called a buy on it. Too risky. I know a few people (I think xxavatarxx) bought in, and they are enjoying a good gain right now. In this market I would suggest either pricing puts or sell the calls before the dividend.

      Just my opinion of course. Good luck to everyone.

19.19+0.23(+1.21%)12:35 PMEDT