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American Capital Agency Corp. Message Board

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  • reits_r_us reits_r_us Jan 4, 2013 2:01 AM Flag

    Question For Doc Reits

    Upon a closer reading of your post, I wonder why you don't just sell the Leaps? Example sell the 14Jan12.50Call for 2.50. You get a 3.00 profit if the PPS is at 12.50 or above by 14JanOPEX(25% profit on today's cost of 11.99/share).

    You are protected down to 9.50 by 14JanOPEX, which is BE. Hard not to like it!

    DocReits

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    • Thank You for the answer, Doc. That makes sense. But now you brought up another question in reference to your allternitive option...the LEAP. Please correct me if I am wrong or not thinking this out correctly. A LEAP is simply a much longer term CALL option then the monthly calls I generally sell..correct? The stock itself is "tied up" for a much longer time unless it gets called sometime during that year. If that's correct, I guess I don't do the Leaps as I really can't have the stock tied up for that long
      You are a "class" act, Doc and I always enjoy your posts. If you get a spare moment, please let me know if my assumption is correct and Thanks again

      Flip

      Sentiment: Buy

 
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