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American Capital Agency Corp. Message Board

  • faaqcee faaqcee Mar 22, 2013 1:37 PM Flag

    OT: Short NLY?

    With NLY up 2.2% today,
    and its ex-date the 27th,
    I shorted a little NLY here(at 16.08).

    I'll probably sell before the ex,
    although, there could be even a BIGGER drop after the ex.
    NLY's dividend is currently .45.

    What do you guys think?


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    • With some pocket change I ordered april 15puts @ 0.08 for the open. NLY usually moves down on dbx and then another .20 below the div adjustment on xd. Just a quick little doubler with a couple hundred bucks. The volume will not be great enough for a Xion sized play.
      Also, It would be a low risk play to short NLY on xdiv with a limit for a few cents above the adjusted price and then cover two days later.I am guessing it would be good for .30-.60 gain. A person doing the same with mtge or agnc would have made out by .50 and .30 respectively. To make 500 you would have to short 1000 shares at least for maybe a nickel above the adjusted drop, unless price momentum wants to push it higher, then you babysit the chart until it starts down again. Not bad for a day's wage. You could do it twice. The day before xd andcover at the close, and on xdd. Dividend payers always close lower than the open on dbx.... I think.

    • I doubled my small short with NLY.
      I may cobver tomorrow some time.
      Does NLY drop much further than its .45?
      Opinions are appreciated.

      • 3 Replies to faaqcee
      • covered at 16.015.
        Got out for very little profit.
        Don't want to pay the divvy.

      • Hey Ray,
        I only ever shorted a stock a few times before,
        never through an ex-date.
        Thanks for the heads-up concerning "the rules".
        I thought I had until tomorrow to cover without paying te dividend.
        With NLY at 16, I'm up .02(woo-hoo!).

        Being short is more nerve-racking, imo
        No wonder the shorts I see on these boards are so nasty.

        I don't HATE NLY,
        I just think that the current div. run is over,
        and the div. hounds are/will be exiting quite soon,

        I probably will cover today,
        if only for a free lunch, if at all.

        Thanks for the reply,
        P.S. Yahoo wouldn't let me put this post under your answer. Thanks again. :)

      • Foxy ...

        Your plan accounts for the fact that shorts pay the divy if you're short the day before ExD?

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