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American Capital Agency Corp. Message Board

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  • yourbestfriendintheworld yourbestfriendintheworld Nov 16, 2012 11:08 AM Flag

    Dollarmite needs a new pair of shoes

    well, there you go. got a little back.

    details are kind of ugly here. long story short, the original ratioed synthetic long got clobbered. i earned a 7.5-cent credit per unit on 11/2, then had to close it between 11/7 and 11/13 for a net outlay of 2.78. roi is meaningless on a position entered at a credit, but my notional counterparty made 3607% roi and 119700% irr. risk was 31.70 and loss was 2.705, giving the lug an ror of 9% and irrr of 283%.

    the clawback was partial. i bought a single unit of the Nov 29 calls for .50 on tuesday and sold them for 1.65 this morning, giving roi 230% irr 27983% risk 0.50 ror 230% irrr 27983%

    for the whole cacaboodle, the net is entry cost .20, exit cost 1.18, for a total loss of 1.38 and roi -690% irr -17989% risk 32.20 ror -4% irrr -112%

    let that be a lesson.

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    • yourbestfriendintheworld yourbestfriendintheworld Nov 16, 2012 11:30 AM Flag

      oops. forgot the ratio in the last calculation.

      entry cost .475, loss 1.605, roi -378% irr -9846% risk 32.43 ror -5% irrr -129%

      • 1 Reply to yourbestfriendintheworld
      • Thanks YBF,

        My Short Puts in the future will be spread with a long leg to avoid the "Oh S$$T" possibilities. Even though I have established my "Rules" for myself of buying the shares in the worse case scenario at my Short Strike, I even considered(for a moment) taking my 30-40k loss in WMC when the sky fell the last few days.

        I am still down 15k, but at a price to book of .9 and almost an 18% yield I will take the shares, rather than the instant loss, on a cover.

        I still see 34+ and probably 35 by EX for AGNC. Think for just a moment about 60 million shares that traded, over the last few days, with half of those exiting at a sub 29 PPS!! How do you think all of those folks feel??


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