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American Capital Agency Corp. Message Board

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  • onion1273 onion1273 Feb 6, 2013 7:41 AM Flag

    Ot.....ARIA calls

    there is a war going on either side of $20 on that stock. The conspiracy theorist in me tells me its the MMs keeping that price down at $20 so the Feb $20 calls expire worthless. The Mar $20 calls are.80 more expensive, I smell a rat. I don't enough about it to play but I think the bulls win.

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    • Onion -

      If you are an options player and think they'll pin ARIA at $20 at Feb. opex, take a look at a butterfly.

      Long 1 19 call
      Short 2 20 calls
      Long 1 21 call

      Using the midpoints for right now between the bid/ask (you'd enter the order as a combo with a limit price), I get an out of pocket of 40 cents (which is your max. loss). If it closes at 20, you get paid a $1 (and make 60 cents). If it closes at 19.40, you get 40 cents (and breakeven), if it closes at 20.40, you get .60 cents (and make 20 cents), etc.

      Max. loss, as I mentioned is your outlay of .40. This is true if price drops to zero or goes to $40.

    • Its acting like its coming to the end of a symetrical triangle, will probably make a big move after ex.

      If a lot of unsuspecting people get assigned and wake up monday with margin calls that could fuel a large move.

      The 200 day seems like firm support.

18.01+0.17(+0.95%)Nov 27 1:00 PMEST