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American Capital Agency Corp. Message Board

  • igster2010 igster2010 May 9, 2013 4:57 PM Flag

    OT: LINE oversold (?), options trading ideas


    I believe LINE is in oversold territory here and I'm looking at a couple of options trading ideas to take advantage of this dip. I'm looking at a Bull Call spread Oct39/34 (sell39, buy34). Also I'm looking at a Bull Put spread Oct39/34 (sell39, buy34). Still scratching my head on which to go with... The plan for this trade is to enter now at the dip and exit when LINE is back in the $37.50-$38 range. Expiration is October so plenty of time for the bounce, IMO.

    Would love to hear any thoughts and ideas re the trade. Thoughts on different strike, expiration and or strategy are welcome.

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    • I opened an initial position in LINE Jul 33calls today...

      IMO- it has bottomed and should recover some of its loss as it approaches the July options.

      It is interesting the LNCO is finally starting to close the gap between itself and LINE. I could not believe nor understand the $4.5 premium of last week!

      • 1 Reply to optionjunkie88
      • katherine.murphy May 10, 2013 6:48 AM Flag

        Good Morning Optionjunkie88, I also believe Line has bottomed and is oversold now.I have tried to find an option play I am comfortable with and I just cant seem to find one. I have to have a compelling reason to enter a trade and with Line transitioning to monthly divs and with some unknowns with the merger. I am going to have to wait for some clarity. Good luck to you, I hope you have a real winner. Bow

    • Igster, the next LINE Dividend is in July and its monthly. The will be no Dividend run up in June. LINE is the ARR of MLP, that is it disappoints investors on a regular basis. Trade accordingly.

      • 1 Reply to mr.phil2u
      • Phil, I'm no MLP expert, but , check out their latest presentation, I don't see LINE as "bad" as ARR in it's sector. Also Look at their 5 year chart. Share price down on Barron's article, I watched CEO's response on Cramer... IMO Line will bounce back to $38+. When? I don't know. Distribution rising. Not sure why you think the monthly vs quarterly distribution would make the stock stagnate or go down. Look at VNR, another monthly, pretty stable...
        Anyways.. we'll see, good luck.

        disclosure: holding LINE May calls and will likely roll them into bull spreads next week, depending on action...

        p.s. I love scooping up panic sells... shorts will eventually have to cover....

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