Is anyone going with MORL during the December divy run? I've mentioned this before, but thought I would bring it up again; since it is a 2x ETN it should (in my opinion) move up twice as much during the dividend run as the REIT counterparts. Granted the date is sketchy but if you sell the day before the first of its holdings goes ex I think you would come close to correctly timing the top. That being said this is its first cycle that matches the REIT quarterly run and we are still facing "fiscal cliff" issues. Personally, I'll be saving my extra cash in case there is a cliff sell off to capitalize on any strong downturn. I may minimize my profits if everything is resolved but I greatly decrease my risk as well. I'll be following its actions this quarter very closely and will most likely dive in next cycle.
I found this in the distribution release from UBS regarding MORL:
"Note: RWXL, DVYL, SDYL and MORL pay a variable monthly coupon linked to 2 times the cash distributions, if any, on the respective underlying index constituents, less withholding taxes, if any. Variations in the amount of monthly distributions will lead to large variations in the Current Yield as calculated above. As such, the Current Yield for each is not indicative of future coupon payments, if any, on these ETNs."
The dividend on the first ex date of 11/8 was zero on MORL because no cash came in during the first month of trading. The next ex date around 12/7 or 12/10 is likely to be zero or near zero as most mReits will be paying out later in December. Thus, it may make sense to buy and hold MORL for most of December if you want to use it to play the dividend runs of December. It's two largest holdings are NLY and AGNC so watch the runs in those issues and sell when you think those runs are ending.
Exactly my point. You're not playing any dividend run of MORL itself, just the divy runs of its holdings; AGNC NLY and so on. Since it is a REIT ETN and we are in the prime 1 month before ex date (for each roughly) it should go up about twice as much, in percentage, as its holdings. This could be upwards of a 10% swing. This is the first quarter, since its inception, in which it coincides with the broader REIT markets ex date so it will be interesting to see whether this is true or not.