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Microsoft Corporation Message Board

instantwinbutton 3 posts  |  Last Activity: Jul 28, 2014 9:22 AM Member since: Jul 20, 2012
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  • Reply to

    Good pair trade

    by instantwinbutton Jul 26, 2014 10:15 AM
    instantwinbutton instantwinbutton Jul 28, 2014 9:22 AM Flag

    In premarket I swapped client to a long/long position. I will swap back after agnc pops on earnings to a short/long position.

  • Reply to

    Good pair trade

    by instantwinbutton Jul 26, 2014 10:15 AM
    instantwinbutton instantwinbutton Jul 28, 2014 8:03 AM Flag

    The portfolios are very similar. Mtge's book value has faired better than AGNCs since 2012 when MTGE went public.. In a falling rate environment characterized by a weak housing market - agnc would outperform to some degree. But in a flat to higher rate environment and flat to moderate growth in housing - mtge outperforms. So it is my belief that the spread will narrow again. Mtge also has access to the MSR market while agnc does not. MSRs are expected to boost mtge's earnings as they ramp up. I believe rates are at the low end of their range and will likely move higher over the next 6-9 months ahead of fed tightening.

  • instantwinbutton by instantwinbutton Jul 26, 2014 10:15 AM Flag

    Get long mtge and get short agnc. The spread is really wide, around $3.65, the widest it has been in 52 weeks. The yield spread is positive 2% as well. I just put a client into this trade on Friday.

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