Took the chance and bought the covered calls back. I was lucky and caught a chance to buy back on a limit that was ok in price. Glad I did, this stock does not want to stop going up. I have a tight trailing stop on it now so we will see what happens. I am up about 11% on this position.
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reduce my position another 5-6%.
Others scenarios are -
The shares go to $35 and you find me scratching my head.
The shares get called at $32 and I reenter after ex-div date.
The price dips below $32, the shares do not get called and I keep the June premium and the dividend. Buy more ex-dividend.
The market tanks, the price drops to $28.50 and I grab more shares.
AGNC - I can make a case for buying it.
Rolled my AGNC May $31 covered calls to Jun $32 covered calls for $.71 debit per call. If the stock stays above $32 at June expiration the shares will be called at $32 and I paid $149.65 to get back $195. I figured my shares were going to get called anyway so maybe I can get a little extra for them by holding an additional month. If the shares fall below $32 and don't get called I will still get the dividend.
I'm still holding AGNC long and personally don't plan on selling CCs. What will you do when they are $33 in June TJ? roll up and out again for a debit?
The IV is so low...so the potential time premium is shit compared to the hurt it can do to your upside...imo.
From what I've noticed, it seems you get a better gain by swing trading the ramp up to div then you ever would selling CCs.
Meanwhile, just being long I'm up 15.2% since Jan. I plan to buy more in June post div.
The IV is so low...so the potential time premium is shit compared to the hurt it can do to your upside...imo.
From what I've noticed, it seems you get a better gain by swing trading the ramp up to div then you ever would selling CCs.
Meanwhile, just being long I'm up 15.2% since Jan. I plan to buy more in June post div.
Obama,
I think you are correct. There should be a pretty good sell off exdiv. What I am wondering is how much will it drop? Being that date is early June, we should see a fairly low volume day unless something happens. Do you think the ramp pre exdiv will flatten a couple days before?
I think you are correct. There should be a pretty good sell off exdiv. What I am wondering is how much will it drop? Being that date is early June, we should see a fairly low volume day unless something happens. Do you think the ramp pre exdiv will flatten a couple days before?
It depends on the div amount I'd say. (I think they will increase it to at least 1.30)
If they increase:
Will rally from declare to ex-div, they'll go flat week of ex-div.
Will rebound within the same week of ex-div.
If they stay the same:
Will rally from declare to ex-div, not as hard though, and flat week of ex-div.
Will want to buy back within 1-2 weeks of ex-div.
doubt they'd reduce again...
This is my guess for now, but that can change quickly based on market.
So yeah, by back within 1 week or so, and ride the wave up.
If they increase:
Will rally from declare to ex-div, they'll go flat week of ex-div.
Will rebound within the same week of ex-div.
If they stay the same:
Will rally from declare to ex-div, not as hard though, and flat week of ex-div.
Will want to buy back within 1-2 weeks of ex-div.
doubt they'd reduce again...
This is my guess for now, but that can change quickly based on market.
So yeah, by back within 1 week or so, and ride the wave up.
That is one possibility, but only if it makes sense to do so. At $33 I will probablyObama Bin'Laden said: I'm still holding AGNC long and personally don't plan on selling CCs. What will you do when they are $33 in June TJ? roll up and out again for a debit?
reduce my position another 5-6%.
Others scenarios are -
The shares go to $35 and you find me scratching my head.
The shares get called at $32 and I reenter after ex-div date.
The price dips below $32, the shares do not get called and I keep the June premium and the dividend. Buy more ex-dividend.
The market tanks, the price drops to $28.50 and I grab more shares.
Well, goodluck with CCs.
I'm in it for the long haul and until the facts change, I'm not going to limit my upside.
Up 16%+ after today's action. This may be my biggest winner for 2012.
Still don't see a reason to sell.
Ex div or share offering will trigger me to buy more.
I'm in it for the long haul and until the facts change, I'm not going to limit my upside.
Up 16%+ after today's action. This may be my biggest winner for 2012.
Still don't see a reason to sell.
Ex div or share offering will trigger me to buy more.
AGNC will continue to rise so long as I sit on the sidelines waiting to re-enter.
Jano... I hear you. I am probably not putting on any more shares unless we drop to $30.50 ex-dividend. You might want to check out AI which is another I own.
I have traded it successfully twice over the past few months and got back in at $23.02 recently. Looking for a target price of at least $23.75 before exiting again.
I have traded it successfully twice over the past few months and got back in at $23.02 recently. Looking for a target price of at least $23.75 before exiting again.
My covered calls were assigned overnight and I liquidated the remaining portion of my AGNC shares at $33.77 today. Will look to get back in ex-dividend unless we get a dip in the price tomorrow or Monday.
I have already setup a purchase lower than $30. It may hit we'll see. In the meantime I bought 700 AINV at a great price and already sold july cc with strike @ 8.00. Short term trade in this crappy market - unless something happens thats out of the ordinary, should see 7% or so increase by mid july. Kinda like the Geico commercial with the opossum. I hope not.
I will probably be back in AGNC shortly. I am thinking that unless something major happens we will not get below $31 during the next 90 days.
I had GNI on my watchlist for the past 2 months. Was waiting for a certain entry but never got there. I missed the dividend announcement - an increase from $2.25 to $3 and off to the races it went from $63 to $80 in a week.
I thought AINV might drop below $6 with the dividend cut, but no dice.
I had GNI on my watchlist for the past 2 months. Was waiting for a certain entry but never got there. I missed the dividend announcement - an increase from $2.25 to $3 and off to the races it went from $63 to $80 in a week.
I thought AINV might drop below $6 with the dividend cut, but no dice.
TJ, I've been in NLY for about a year and a half. Early in 2011 I was also experimenting with IVR, HTS and AGNC, although I think the only position I took was in IVR, which I took a bit of red on. I took a look at the dividends on all of the them today. What I find interesting is that in a little over a year they have all sort of converged around that 13% - 14% level. Eighteen months ago NLY was the marquee name and the others were upstarts trying to get into the market so were all offering higher dividends than NLY. I think AGNC was paying 18% or something like it.
What do you think? Has this mortgage REIT market matured a little and so offers some opportunity for risk spreading. I have a small position in NLY but would like to get more exposure to these nice dividends but don't want to do it all in one stock. Maybe now is a time one can diversify within this group by buying the names that came behind NLY. I know you've been watching it. Any viewpoint?
I mean, I know you've been in AGNC, but would you think of taking a full position across two or three of these rather than pile it all into one?
What do you think? Has this mortgage REIT market matured a little and so offers some opportunity for risk spreading. I have a small position in NLY but would like to get more exposure to these nice dividends but don't want to do it all in one stock. Maybe now is a time one can diversify within this group by buying the names that came behind NLY. I know you've been watching it. Any viewpoint?
I mean, I know you've been in AGNC, but would you think of taking a full position across two or three of these rather than pile it all into one?
MP... I don't really have an opinion regarding whether the mortgage REIT market has matured or not. I actually have several of these positions currently to reduce the risk of exposure to any one of them. For most, myself included, I believe this is prudent, but then there are days when I wish I had devoted a larger portion to AGNC.
I am currently out of AGNC and I will probably be a buyer again at some point ex-dividend. The last 2 quarters the price did not fall off like it had done in the prior quarters.
I am currently out of AGNC and I will probably be a buyer again at some point ex-dividend. The last 2 quarters the price did not fall off like it had done in the prior quarters.
“FOR THIS POST ... I am using starting cash of $30,765
Bought 1000 shares at $30.76 on Jun 9, 2011 w…”
Just curious TJ, as a long term play and looking back as we don’t have the opportunity to do along the way, care to say what you could have done better? Maybe comparing to SP’s approach of the market? Not to put you on the spot, could have and did are both past tense.
EL D - please note that the original post was a hypothetical situation. What actually transpired in my account was quite different. But as requested here are a few observations that may have made this a more profitable trade:
1. Oct 3rd the price dropped to $22.84 but I did not have an order to buy anywhere near this level. The price drop was intraday and I was away from he computer when it occurred. I usually don't use GTC orders. My lowest purchase was at the $27.16 level.
2. Oct 4th - sold some of my AGNC shares at $25.20 to buy DHT. I sold the DHT shares and made a profit of $87.75 net of commissions. Had I bought the same $ amount of AGNC at $25.20 I could have sold them for a profit of $131.17 net in a shorter time period.
3. Do not sell shares below the level of the dividend. If I buy at $27 and the dividend is $1.40 (as it was), I should sell for $28.40 minimum. If I am only selling 20 shares then $28.65 or higher is probably a better number to cover commissions.
4. Covered calls - mixed emotions. I was able to keep the premium on two occasions, but needed to roll the option on another. I let 200 shares go for $31.39 net after rolling and getting assigned. Without the CC I could have sold those shares for $33 or higher, although I probably would have sold off in increments like 32, 32.50, 33, & 33.50 but that would have been significantly better.
5. I might have done better selling puts 1-2 strikes OTM and using that as my buying levels. I don't think this was available to me when I first started trading AGNC. Of course if someone put stock to me at $26 when AGNC dipped below $23 that might have not set well with me at the time. In the long run it would have been okay. I would have to weigh the put premium received against the dividend.
Thanks for the question. It made me examine some things, that I was beginning to look at, in depth. Is that any help to you or others? Let me know.
1. Oct 3rd the price dropped to $22.84 but I did not have an order to buy anywhere near this level. The price drop was intraday and I was away from he computer when it occurred. I usually don't use GTC orders. My lowest purchase was at the $27.16 level.
2. Oct 4th - sold some of my AGNC shares at $25.20 to buy DHT. I sold the DHT shares and made a profit of $87.75 net of commissions. Had I bought the same $ amount of AGNC at $25.20 I could have sold them for a profit of $131.17 net in a shorter time period.
3. Do not sell shares below the level of the dividend. If I buy at $27 and the dividend is $1.40 (as it was), I should sell for $28.40 minimum. If I am only selling 20 shares then $28.65 or higher is probably a better number to cover commissions.
4. Covered calls - mixed emotions. I was able to keep the premium on two occasions, but needed to roll the option on another. I let 200 shares go for $31.39 net after rolling and getting assigned. Without the CC I could have sold those shares for $33 or higher, although I probably would have sold off in increments like 32, 32.50, 33, & 33.50 but that would have been significantly better.
5. I might have done better selling puts 1-2 strikes OTM and using that as my buying levels. I don't think this was available to me when I first started trading AGNC. Of course if someone put stock to me at $26 when AGNC dipped below $23 that might have not set well with me at the time. In the long run it would have been okay. I would have to weigh the put premium received against the dividend.
Thanks for the question. It made me examine some things, that I was beginning to look at, in depth. Is that any help to you or others? Let me know.
EL D... the post above from Investin Mom is from me, Tampa Jake. My wife logged me out and logged in to check her account and did not tell me. She stepped away to check on something and I came into the office while she was out. I had logged in earlier and did not realize that she logged me out and had gotten on the site. I posted, hit the submit and realized the mistake just today.
so TampaJake is InvestinMom.... Don't they call that in DRAG?
this stock continues to be a big winner for me. up 25% since jan (~50% annual yield).
bought in jan, march, and june (usually after ex-div or into weakness)
as long as the feds keep the rate low...the margins will remain great for agnc.
it may sound ridiculous that I'm not that diversified, but my agnc position in my ira has now grown to over 50% of my ira's value.
I'm young - 25 years old. engineering job - can contribute and invest.
I bought agnc calls for august in my account here which have almost tripled already.
I know I should rebalance my ira portfolio but the gains are just too great.
even if it were to drop 10% I'd still feel comfortable with a 15% gain annually since it's an ira....even a 10% annual gain compounded for 40 years will be a good junk of cash.
until news that affect agnc's business comes out, I dont see any point in closing and/or not adding to this position over time.
I dabbled in NLY some in Jan, closed out in feb or mar, wasn't satisfied with the returns - a good choice for me.
I'm being relatively safe in my IRA and feel a high div position is a requirement when looking out 40 years.
I also have a decent sized position in PG which is currently down about 3%
recently opened some positions in MS and XIV for a swing.
but AGNC is my Miracle.
bought in jan, march, and june (usually after ex-div or into weakness)
as long as the feds keep the rate low...the margins will remain great for agnc.
it may sound ridiculous that I'm not that diversified, but my agnc position in my ira has now grown to over 50% of my ira's value.
I'm young - 25 years old. engineering job - can contribute and invest.
I bought agnc calls for august in my account here which have almost tripled already.
I know I should rebalance my ira portfolio but the gains are just too great.
even if it were to drop 10% I'd still feel comfortable with a 15% gain annually since it's an ira....even a 10% annual gain compounded for 40 years will be a good junk of cash.
until news that affect agnc's business comes out, I dont see any point in closing and/or not adding to this position over time.
I dabbled in NLY some in Jan, closed out in feb or mar, wasn't satisfied with the returns - a good choice for me.
I'm being relatively safe in my IRA and feel a high div position is a requirement when looking out 40 years.
I also have a decent sized position in PG which is currently down about 3%
recently opened some positions in MS and XIV for a swing.
but AGNC is my Miracle.
While I have been impressed with this stocks continued gains, there are signs that their profitability may be waning plus their valuation is getting into unknown territory. I decided not to reinvest after the last drop as I felt it did not sell off very much. I instead bought AINV 4th of June and I already captured a dividend.
I am also holding onto some TWO. It doesn't hurt to diversify some. May not seem like capital gains would be as great as AGNC but you also do not have as much a worry about hanging onto gains.
Good luck though.
I am also holding onto some TWO. It doesn't hurt to diversify some. May not seem like capital gains would be as great as AGNC but you also do not have as much a worry about hanging onto gains.
Good luck though.
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