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American Capital Agency Corp. Message Board

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  • slegermark slegermark Jan 2, 2013 9:41 PM Flag

    OT: LINE ... is anyone planning to trade LINE on this dividend run up?

    Hi Xion,
    I have been making modest moves to rebuild my cap in safe steps. Monday I picked up a smattering of calls around share price of 35, and I will sell half of them as soon as they double in value, which could be tommorrow. Then I will hold the remainder for the div run. If I sense skittishness coming to boil, I could get some short term puts.
    Heck of a day. Did you have anything in play?

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    • I have purchased 818 LINE February 2013 $35 Calls for 1.69. I plan to hold these Long till LINE reaches $38 pps at the height of its dividend run up between late January and early February and I plan to sell them for 3.00, I hope. I am holding $50k as backup, just in case things go south...I can start all over again from $50k, instead of $0. Good luck to us all, I'm buying another "rabbit's foot" for good luck and I'm going to hold on tight to it.

      Sentiment: Strong Buy

      • 1 Reply to xionrevolutions
      • So you put 139k chips on the table. Not bad salary for the first month of the year.

        I just doubled my substantially smaller position in line this morning. Did not get as good a price, 1.75
        Also picked up some QRE July[I think] atm calls.

        The absence of a market selloff this friday is promising for the remainder of the winter. Until feb when debt limit brinksmanship upsets the cart.

        When you check the LINE summary page there is an article "Oversold Linn Energy could rally..." That is the article that prompted me to double up. I tried to post it here but could not get around yahoo filters.

        Then there is the OptionMonster article about your trade posted at 10:55 eastern.

    • I don't have any money in LINE right now. I'm planning to build a position in LINE next week (next Wednesday - Friday), I kind of sense that the market might open lower tomorrow...once this Fiscal Cliff Deal "euphoria" has worn off...but I may be wrong. It might take a week for it to go away and investors in general will realize that the economy is very much in the same spot it was 1 year ago. I'm hoping to see the pps of LINE go down to $36 - $36.25 before I start building a position in LINE $35 February13 Calls.

      Sentiment: Strong Buy

      • 1 Reply to xionrevolutions
      • "and investors in general will realize that the economy is very much in the same spot it was 1 year ago."

        We hopefully have learned in the last year that market sentiment trumps a nice dividend on the way. And to drive sentiment, there are plenty of articles telling us the cliff is not over and we have a credit downgrade coming if brinksmanship dominates the debt ceiling politics. It might not be a bad idea to accumulate silver for the day of the piper.

        I am thinking the way to play the market this year is to buy puts when exhuberance is high and sell puts and buy calls when in darkest of days. Even I get spooked when there seems to be no light. As you suspect, there will be some swings to take advantage of.

        Today's rally was much like the one in Sept when Uncle Ben announced QE3. I positioned myself with weekly strangles before his announcement. The subsequent rally lasted for three days when I thought it would be only one. If we count monday's expectation as day one, tomorrow could be the last day and then selling begins on friday. Selloffs are relentless. A few hundred dollars spent on otm puts might not be a bad idea for those suprise bear sessions that can spring suddenly and last weeks.

        This reminds me of hopping from log to log on a river drive. That's midwest surfing.

        Hey do you cure your own bacon off them wild hogs you shoot? It is not hard to do and well worth it.
        Dry cure gives the best control.

 
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