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American Capital Mortgage Investment Corp. Message Board

  • instantwinbutton instantwinbutton Feb 22, 2013 6:23 PM Flag

    Time to sell the $25 march put contracts

    Rich premium, would be assigned before ex-dividend... Great way to make a healthy profit for a short duration play, or own the stock at a nice discount to book. I'll be looking to start a position Monday... which probably will be a down day... "The case of the Mondays" ... the markets don't really like Monday. So higher premiums would be wonderful. These babies are going to depreciate into nothing in about 20 days. Best short option play in a while... the recent share offering had done a lot to improve liquidity at MTGE and stabilize book value while improving asset yields in a more attractive agency market.

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    • Nice call IWB - Monday the whole market took a hit!

    • Another interesting play is the WMC put options for july. The company has yet to release its earnings and during that Q4 it increased its dividend to $0.90/share per quarter. It is my belief that based on other mreit reports and the dividend increase in Q4 would give rise to the stock price on the earnings release thus destroying the value of the longer dated contracts more than the shorter dated ones. The $19.78 strike looks like a nice entry point with a yield to expiration based on a purchase price of $19.78 creates a healthy 8% return for a period of 5 months.

17.67+0.13(+0.74%)Sep 27 4:00 PMEDT