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American Capital Agency Corp. Message Board

  • knh1234 Mar 15, 2013 2:18 PM Flag

    aprill calls 33?


    I have sold april calls at 33. Do you think I will lose my shares today?


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    • So did they get called away?

    • knh1234 Mar 18, 2013 4:25 PM Flag

      I have good news for me self! I am not called. So I have the shares still in my portfolio.

      Sentiment: Buy

    • Bump..................

    • yourbestfriendintheworld yourbestfriendintheworld Mar 15, 2013 4:05 PM Flag


      Today isn't April expiration, so there won't be an automatic exercise yet.

      Many of those who hold the calls may expect the stock to experience a drop on Monday larger than the div, and may also expect the price to rise again by April. So not all of the calls will be exercised.

      Assignment is random, so you have a chance of being assigned, but not a 100% chance.

      The 33s don't seem to be involved in the div-strategy. Look at the deeper-ITM tickers for April and beyond and you'll see tens of thousands of contracts opened today; they will be exercised in order to capture the divs by taking shares from option writers like yourself. If the 33s were involved, you would have nearly 100% chance of being assigned, but they aren't, so your chance is considerably lower.

      Safest thing to do is to buy to close and walk away from the risk.

    • knh1234 Mar 15, 2013 3:56 PM Flag

      Thnx for the replies.

      But I sold the april calls and not the march one, so both are the same?

    • It turns out that I have studied this scenario in some detail today. This is what will happen.

      If the calls are not exercised you will make money if you buy them back on Monday which is probably the least likely scenario.

      If the calls are exercised then a short position will appear in your account and you will owe the dividend on it unless they were covered by shares in which case you lose the shares and they dividend you would have been paid on them. You will be able to cover the shorted shares on Monday for less than the $33 you were forced to short them at however this profit will be canceled out by the dividend that you owe. In the end your loss will be approximately the commissions you paid to do all of this.

      However if you get lucky and sell your options to someone who is asleep at the wheel then you will pocket some money. If we don’t hear from you I am assuming that this is not what happened.

    • If we close at 33.01 or higher today you should count on it. The way you guage assignment risk is to compare the extrinsic value on the option to the dividend. All call options in all expirations on AGNC currently have no or negative extrinsic value so the chance of assignment is fairly high. There is a $15 exercise fee assessed on both parties of an assignment transaction but the normal commissions are not charged. So if you have sufficient shares then this is a neat way of closing your trade at lower cost.

    • If yu can't understand simple thing, why are you in call or put business. Simple. you sold $33 Aprl call, you will only lose your shares if the price rises above $33.

      Sentiment: Strong Buy

    • You have no chance of not being called. But I have this feeling, looking at your history, that you don't think in rational terms so I don't expect you to understand that. Here is an example of your irrational statements:

      "I am a socialist, but I don't hate rich people. I like rich people. I hate only poverty!!

      You mean that type of "poverty" which follows all socialist regimes? Think about that...and you will discover that when A implies B and B implies C then A implies C.

      I will help you:

      A:I hate ... poverty
      B; Poverty is a direct result of Socialism
      C:I am a socialist

      Implication: I hate socialists...therefore "I hate myself".

      Do you even understand how confused you are?


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