Have you seen the 10 yr bond? it's 2.47%. It keeps falling... it's down like 60 basis points from 7 months ago. What rising rate environment are you talking about? We are in a falling rate environment. Might even drop below 2% by the end of the year. That said, I am short the 10 year treasury at 2.475%, 4 contracts (US 10 yr futures). I also own 21,500 shares of MTGE and have 215 $20 MTGE September calls . I must warn you... That if you are short, you should consider covering until post earnings at the very least. I believe AGNC and MTGE are going to go up 15% or more over the next 3 months. Remember, these things can trade above book value very easily. Especially since the rates are coming down. I am not trying to root against you. I am simply stating the obvious. Heck, you might even make some good money shorting later this year.. but right now.. being short is a losing strategy. Keep a close eye on the 10 year bond.