Sold June 26 puts and bought June 27 calls with the proceeds
when the price was still around 26.25.
Immediately after I did that, the price started heading lower!
I'm not kidding! I did that trade at 2.33 pm ET
I apologize for my bad luck. The market sometimes likes to behave in a way least favorable to me.
But, anyways, does my trade make sense to any of you or is it completely idiotic? I would like to hear your opinion!
The implied volatilities are rediculously high. If you wanted to buy AGNC you certainly picked a good way to do it as this is the highest premiums you will ever see. Maybe this is why the options investors have lost interest in posting. These options are just too expensive to buy but great if you are selling them. Of course if the stock price goes up the shares will not get put to you. I guess you can sell more puts then. I think it is a great trade for anyone brave enough to be long.
you maybe could improve the trade by buying the call deeper in time. buy the call out a few months and get the front month short puts to pay for it. after the front month expires you could have a free call. that makes the big money if the market goes your way.