I opened a small long underlying position today, which is unusual for me since I normally stick to options. Will look to add more if we stay under $25.
MTGE's board is useless. I think Reik finally cracked.
No, it will not. Option price adjustments are done when unexpected special dividends are paid and then only if the special dividend is large enough to create a proper new strike price for the option.
For the periodic dividends, the OCC just figures the market will price the options to account for the expected change in stock price from the expected dividend, and will do so from the moment the option is opened for trade. So no adjustment.
mREIT divs are much closer to periodic divs than to special divs (even though the amount of the div can be changed in surprising ways) so they don't get their strike prices adjusted.
Just bought more MTGE @ $24.92...sending a big "Thanks" to the market for driving the shares even lower, and well below BV, after the ex-div date...shouldn't take long to recover...GLTA
I tripled my MTGE position size today by buying more at 24.95. Excellent management growing BV and paying a dividend. Any buy at a price less than BV is a bargain for MTGE. I like the ones I bought on Feb 21st at $25.35 better because those shares have already collected one dividend so they were cheaper than today's.
And I bought a bit more today at $24.83. Both AGNC and MTGE are trading at 98 cent/$ p/b on my expected 1q13 BV and are the top two value plays on mREITS today. I am buying MTGE over AGNC though because I like their smaller more nimble portfolio size, it's much harder for AGNC to make huge opportunistic portfolio shifts now than it used to be.