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American Capital Mortgage Investment Corp. Message Board

  • faaqcee faaqcee Apr 24, 2012 10:58 AM Flag

    Bought More At 21.99

    I was waiting for a pullback with MTGE but the closer we get to the ER, imo, it is less likely of that occurring. Only 1/2 of my order filled at 21.99. I had an order in at 21.95 this morning after the open and although the price hung at 21.95 for a time, the order did not fill, compelling me to raise my bid. With a good ER and CC, and a dividend at least of .90, MTGE should rise to 22+. With an increase in the dividend, I agree with the board here that MTGE may go to 23+. So for me to split hairs over a few cents in my bid today is a tad silly. Will MGTE pullback before earnings? Probably yes, now that I bought at this price! But, the rest of the cycle should prove this to be a wonderful buy. Imo. Good luck fellow longs. FOXY

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    • G'morning Jim (and Doc et all). Thanks for the advise Jim, and yes, I can I see that now (though the Sept 20's are at $3 each now). Next month marks the 1 year point since I took the proceeds from a bond & began investing in stocks instead - and it's been an outstanding ride so far - one that wouldn't be nearly as great as it has been without learning so much from you, Doc, Ben, and others from the AGNC board in particular. So, from mere covered calls to puts, and now buying calls this year (and probably some spreads). I enjoy (and definitely appreciate) learning & then trying new methods of attack - thanks!

    • Correction:

      "When AGNC hits 24, you will pocket 3.10/spread, for an ROI of 3.10/.90, or 344%."

      Should read, "When MTGE hits 24..."

      Old habits die hard.

    • Hey Doc,

      That looks like a winning trade to me. You've got to love a net long position of 20.90. Let's hope that the X-d. and the June OPEX are relatively close in time. When AGNC hits 24, you will pocket 3.10/spread, for an ROI of 3.10/.90, or 344%.

      If the stock goes nowhere between now and X-d., at the current price of 22.62, you still make 1.72 per spread, for an ROI of 191% (1.72/.9).

      Sweet! Looks like you will be joining Ray in Tahiti after this trade. Maybe Roy can bring his new SS BMY over to the islands for a visit. :-)


    • I did a similar trade Buying the June 20Calls offset with May22.50 short Puts for a .90 debit. That will hopefully be my sweetest trade of the year.


    • WTG Sleger. Your post helped me to make my decision as well. Thanks.

    • Hey FN,

      Well done on your entry prices. You patiently waited until MTGE showed signs of life, and then you pounced. You will make nice bank on your positions. A price of 24 will give you a profit of $6,512, with a 7.9% ROI.

      I don't know if you are trading options on MTGE, but I ran a quick model of how you might achieve a similar profit using Sept 20 calls. Assuming that the calls are trading at 2.80, and that MTGE's price will reach 24 chasing the next dividend, you could purchase 55 contracts for $15,400 (just 18.7% of the $82,288 that you have invested in the stock), and at a stock price of 24, you will have a profit of $6,600 (ROI of 42.8%). The Sept date also gives you a look at the Sept dividend run, should a short term disruption derail the June dividend run.

      Just something to think about.


    • Good call Slege!

      I'm glad I held on to my MTGE shares and sold my AGNC shares. It looks like earnings will be good, maybe even a div increase.

    • goodell Apr 26, 2012 11:27 AM Flag

      Flight, also the div money for re-investors will hit tomorrow. The timing of the " double spo " did not facilitate me but like AGNC most MTGE investors will stay in !

    • Bought 2000 shares in one account today at $22.40 & 1700 in another account yesterday at $22.068 - looking for it to hit $24 or higher this cycle! If they raise the divident then wowie! GLTY all !

    • predicted this week's action, and probably next week.

      "Hi Olee,

      MTGE entered a BB(Bollinger Band) "squeeze" on April 11th. The last two were Nov 22nd and Jan 11th. This is a time of significant reduction in volatility.

      The last two broke out to the upside after two weeks of entering. After the squeeze, the break out is either up or down significantly. The last two were to the upside. I am betting that the break out will be to the upside this time within two weeks of April 11th(25th)."

      Generally positive earnings reports so far for Q1 is sending the broad market higher.
      That helps.

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