There is currently 107,159 open int calls
and 56,869 open int puts (across all strikes and all expiries).
Because the company would rather people were buying stock than buying options, they will tiem the corporate events in such a way as to make it most advantageous to stock holders and least advantageous to options holders.
With calls outnumbering puts by almost 2 to 1, that means they will announce the dividend when it will be least useful to the call holders (Monday) and they will announce the next SPO in such a way as to make it least advantageous to the October call holders (sometime in the 1st or 2nd week of October).
Yes, Luke. I can feel it. The pent up exhilaration. The joy of rage. The feel of engorging stock price waiting for the shoot up. Carousing forums, looking for a quick target of your next torrent. It's all at the tips of your fingers... Release the fury!
Here is what I was referring to. Its the FOMC mtg that the Bernanke was talking about. This will occur on the 20th and 21st:
I have the next SPO gantted on my spreadsheet as 9/23, with announcement after market close on 9/22. With XD date now posted as 9/21, that gives us until close of 9/20 to reach a share price of $30 (or more) to enable the SPO and satisfy the BATESAT investor. It only takes $0.89 in 5 days of trading to get to the hallowed ground.
Hmmm, guess the Board of AGNC decided to help the option traders, and give the shaft to shareholders. Declared the divvy today, $1.40.
Think this throws your stock vs. options theory out the window, at least with respect to management, eh?
A wise man once said something about knowing which battles to fight; a corollary would be to know who's your enemy.
Personally, I'm very happy with the announcement, holding the divvy at $1.40. While some were hoping for an increase, I'm quite happy if they keep it steady, through 4th quarter, and also into next year, when the refi program is rolled out. Would rather they have a little more undistributed earnings in the armory, so they can keep it nice and level.
Watch this puppy run in AH!
> Hmmm, guess the Board of AGNC decided to help the option
> traders, and give the shaft to shareholders. Declared the
> divvy today, $1.40.
True. This was a fairly unexpected (albeit not unwelcome) early announcement. I am going to be curious to see what pushed in this direction. My initial guess is that they are not planning on offering an SPO (so it would make sense that they are not as interested in providing every possible penny of support to the stock). This is somewhat influenced by the fact that they can only offer 2 more SPOs in the next 3 quarters and the fact that the LR IRs are so low that they don't have much to buy at the moment.
How does this hurt shareholders?
They have a week to watch the runup and dispose of your shares before the div, or you can hang on and collect the div. I plan to do the latter.
It is also good for option traders, yes. I plan to close my synthetic long (equal number of bought calls and sold puts at the same strike and expiration) at the peak before ex-div. Then I'll enter some sort of short option position and ride it through ex-div and the imminent following SPO. Then take a long option position, maybe top-up my long shares, maybe set up a little BATESAT play. Lather, rinse, repeat, laugh all the way to the fu-kang bank.