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  • reits_r_us reits_r_us Nov 1, 2012 3:48 PM Flag

    AGNC Dec Calls

    Hey Arsh,

    Its a crap shoot. I thought the Sept EX would fall after the Sept OPEX and it didn't. In fact, the dates have been moving up. There has not been a Q in the last 7, that has had the EX after the 21st of that respective EX month. Dec OPEX is late(Dec 21st). Those Dec Calls might be OK. That is what the MM's believe also, as the options (Puts) are priced for the EX occurring on or before the 21st.

    Ultimately, you are correct. If you can pick up January for about the same price as Dec on the Calls you are better covered in case the EX occurs after the 21st. We'll see soon...;-)

    Best

    DocReits

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    • Hi Doc,

      Understood. It's just I'm getting tired of reading negative comments about options. They are being greedy instead of winning 20-30% for instance January options, they want 50% in dec options because they are down and want a homerun. Then they complain instead of complaining how they suck at this. It's not difficult to see several option prices. Hope you're doing great. Might come in for a short trade in December. Having fun with FB puts too much.

      Best, Arshak

      • 2 Replies to arshakandriasov
      • yes, I got caught with my pants down last year with EVEP OP Ex before the dist. date. Was lucky to get a profit on that one, but was down big for a while. Lesson learned.

        I really don't understand the reasons for buying DEC over JAN though...if they're trading at the same price you're getting a month of time for free with the JAN's!

        I think what you're seeing here lately are the "misery loves company" thing. There are a couple of negative posts regarding options in general, but I hope all of the good posters don't leave because of it. There's a lot of good information being shared on this board.

        PS...I was looking at the FB Jan 19 puts, but didn't get filled! maybe there will be a little pop and I can get in there with you. How much do you think the price will drop after Nov. 14th? $2 would be nice.

      • Arshak, it's not just simple greed.

        Trading options requires a skillset that is much greater than trading stocks. From 2002-2012, I averaged 13.5% yearly returns on my stocks based on dividends and capital gains. The exceptions were 2008 when I took a 50% loss and 2010 when I scored 200% gains.

        I've considered what you have said about buying options with longer expiration dates. All of my losses have come from my lack of understanding the relationship between the premium and OPEX. I always went for the cheaper premium, not knowing that my risk went up dramatically.

        So know I know better. I lost all my money trading options, but I have (had) excellent credit and have access to credit lines.

 
AGNC
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