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American Capital Agency Corp. Message Board

  • raybans2 raybans2 Mar 15, 2013 11:51 AM Flag

    That was fast

    "Boeing Co said Friday its 787 Dreamliner jets could be airborne within weeks with a new battery that includes safeguards against overheating, and was confident the U.S. aviation authority would approve the redesigned power unit soon."

    Hopefully the safe guard is not to shut down the battery and leave the plane without electricity. Joking aside, it is my understanding is that the battery is used like a hybrid battery in a car where it allows the electrical generators connected to the engines to run under optimum conditions by charging the batteries in burst and then shutting down the generators between charging burst rather than running the generators all the time at under capacity where they are inefficient. My guess is that they will adjust the charge discharge cycle to improve safety at a cost to efficiency.

    Also I'm getting ready to call my broker in a few minutes to find out if it is possible to sell AGNC calls in the last minute of trading today and thus keep them from getting exercised. With automated trading it may not be possible to slip something like this under the MM's radar but I am curious to give it a try. If my broker tells me that it would be a waste of time because the MM won't allow me to do anything that would allow me to make a guaranteed quick buck then I won't bother trying it. I'm assuming that is what he will say. I just want to know for sure.

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    • Bumpppppppppppp

    • Hey Raybans,

      "Also I'm getting ready to call my broker in a few minutes to find out if it is possible to sell AGNC calls in the last minute of trading today "

      It is possible of course. The question is will they get assigned and have you owing the dividend. You realize that the assignment will leave you short the shares at the strike price and owing the dividend, correct?

      We have had, many discussions regarding this in the past. The Call premiums will not fall in proportion to the dividend reduction in PPS. IOW, a Sep33Call at .45/.55 today at a PPS of 33.20 will still be .45/.55 Monday at a PPS of 31.95.

      Also even with a sell off post EX, the spread will be against you all the way down to a PPS of 31.50. Those Calls are miss priced btw, and should be more expensive giving you more of a credit, which is another strike against your plan.

      Which contract month were you thinking about? Also any ITM(strike + premium) option will be assigned. Also there is always some dope that will exercise and assign you even with OTM short options. There is no guarantee that even OTM short options won't be assigned, and your broker surely cannot offer any kind of guarantee.


    • You can exercise a call after the close of regular trading.

      There is a bit more to it than this, but the bottom line is there is no free lunch to be had here.

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