AGNC strategy going forward if you didn't get out/short/etc.?
Looking for feedback - Currently holding shares (all in, no cash reserve) just under $34.90 based on what I thought the technicals were doing. Blind sided by the sell off. Current plan is to either:
A.) Sell a Dec call above my cost basis on a run up to X-Div date and go to cash If I can get a call above my cost basis and equal to or more than the dividend amount, then sell a Jan call.
B.) Hold and collect the dividend then sell the Jan Call.
Thoughts? constructive comments?
Agreed. I have read over a bunch of the posts on what might happen with the dividend payout, and even if it drops in 2013 to 10% (which I think is unlikely based on what AGNC management has said so far) I'll be able to recoup the losses and possibly make some money next year. It's just frustrating, especially when going over things and analyzing what I could have done better. For instance: I see where I could have taken about a one dollar per share loss at the break through support on the price, then gotten back in at a lower price with a cash secured put and I would be looking OK right now. Frustrating. Educational, but frustrating.
TA is bogus at the best of times, but in the case of mREITs will kill you.
Selling calls right now is probably not a good idea. There's a div announcement coming, and then a div runup. Your time horizon and certainty about a decline have to be very tight to justify making any bearish plays on this stock.
Collecting the div, or selling at the pre-div peak, are your best bets for getting some of your money back. I don't think we'll see 34 in this runup, but maybe. 35 is really unlikely. We'll need to see the new income-tax structure that Washington is putting together. That's probably true of all sectors.
Surf the fiscal cliff news until it's either enacted or obviated. That's my strategy.
Thanks for the input. TA has served me pretty well the last 10 years (along with a modicum of fundamental analysis), but I missed the trend reversal by being too optimistic based on past TA performance - so you have a point. I've got the patience and discipline to work out of the position and I'm tending towards collecting the divvy to start lowering my cost basis then moving forward. After the dividend my cost basis will be more workable and I can start looking at various option tactics. It just bothers the heck out of me to have "dead" money for several months.