As soon as Wed morning broke with the news of the election, I bailed on everything, except AGNC and WMC. I had NYMT, four different mReit Preferreds, PSEC and FSC. I am way upside down on WMC to the tune of about 30,000 in the hole, on paper yesterday...with Short Puts. My BE is 21.00 on the Jan contract. If I am assigned I will ride them, and if not I will roll them @ January OPEX to latest month open, at that time.
If WMC is up near 21.00 @ Dec EX, I will exit. It was an interesting experiment, as after awhile I reconciled myself to being down the money and own the shares, with a calm over further decline as I was ready to collect the dividends and make it back over a year or two, in a worse case scenario.
Quite a difference from my white knuckle days with short Calls on the ^OEX. There's only open space above your head there,( IOW, the sky is the limit), for your losses. No shares to collect, no more of that; in fact, I am tempering my ventures in short Puts by doing them all in spreads, presently, and hopefully, in the future, to limit downside risk. Gosh, even this old granite guy is evolving...;-)
Well, I guess we all change some time. I bought Jan 2015 25 calls a few days ago for 4.65. I've never gone that far out & in the money before. Naturally, the next day it fell into the 28's, but today was better.
I had (what I thought were) extremely low price alerts set for FSC as well as MTGE and several others in the mReit sector. Needless to say, my inbox has been filling up the past few days.
I did put in a bid for a 17.50/20 Dec bull call spread on WMC the other day, but only got partial filled for a tiny position (5 contracts). Never traded that one before either.
Interesting that you mentioned preferreds. That's something that I had not considered until recently, but someone turned me on to MITT-PB the other day when it was near $25 (the call price - if that's the right term). It's $24.22 today and not callable until 2017, I don't think. I was actually considering buying that one on margin (a double first for me since I've never bought stock on margin before), but that might be too much change for me. I must getting older...
I'm also watching the pull back in MLP's with interest (almost traded LINE a few days ago on the dip below 37) and considering BMY if/when the fiscal cliff gets pushed back a year.
The vast majority of my cash is still on the sidelines. I'd love to put more on AGNC but this market has me rattled right now.