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American Capital Agency Corp. Message Board

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  • reits_r_us reits_r_us Nov 16, 2012 6:17 PM Flag

    OT - BMY

    Hey Jdg,

    I was surveying a bid on BMY today( disclaimer to all...follow my advice at your own risk....no sour grapes if I fall on my face...kind of like dominoes last time, huh?), and I would think a minimum of 33( all things remaining stable....the big "IF") by next EX. Poor timing as we added .90 today. On any pull back going forward, I will start accumulating Short Put spreads(33/32) and long Call Spreads(31/32) for December.

    Late OPEX in Dec(21st...end of world), will take us up to a week from EX in Jan. Poop will be shot especially with wrangling by Congress, I am thinking to the 31st, so no worries about missing the pull towards EX.

    I hear you re March. I would enter at Jan EX in playing March.

    Best,

    DocReits

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    • Why BMY since its Yield is only 4.40%?

      • 1 Reply to gniognat
      • Hi Gniognat,

        A lot of the AGNC folks trade BMY for one reason only....its consistent dividend run from one month out to EX. A lot of us just look at historical runs and then see the percentage of wins over a given period.

        Last time I looked I think BMY is over 90% positive(.50, or higher, one month out, on the run) for the past 15 quarters, often running 2-3 dollars on a 32 dollar stock.

        Another nice thing about BMY is that the spread is so tight..just a cent or two, between bid/ask. I ran a few hundred 30/31 or 29/30(I can't remember)Bull Call Spreads last run for 7-10k profit, I believe. I was able to unwind them so neatly as the PPS climbed, because the spread was really tight. Try that on mReits or MLP's...no deal on most.

        This run might be more tenuous as we have this wall in front of us, Jan 1st....

        Good luck,

        DocReits

    • Thanks Doc! Always good to have another point of view.

      I think I'm going to wait for a few weeks before starting to build a position. Maybe I'll get lucky with a pullback.

      I still like the idea of buying March contracts as insurance against the Cliff, but we'll see where prices are when I start buying.

 
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