Do Not Panic Out Of American Capital Agency [View article]
The drawback to options on AGNC (or any other similar structure company) is missing on the dividends. I've thought of doing an article on it, this may be the push needed for the research and (uggh) writing.
Do Not Panic Out Of American Capital Agency [View article]
We all do. Glad to see it really, I was concerned that the market did not react last week enough, tells me something might be afoot. Back to normal this week, glad I left my stops in place, accumulating now.
Do Not Panic Out Of American Capital Agency [View article]
Please, please, please sell all your shares, I'd just love for this to tank on me while a gather up more shares! I have buy orders in for multiple drops and hope they all come in. At current levels you are looking at a 5 year payout and the rest is clear money plus the stock and continued dividends. Of course there is risk, but compared to its contemporaries AGNC takes the cake.
American Capital Agency: Look Elsewhere For Bargains [View article]
Bigger, better (more efficient), higher payout. Most folks don't buy mREIT's assuming share price increase they buy them on the dividend payout and share price increase is just icing whereas with most stocks the opposite is true (bought for share increase with dividend as icing). AGNC is an excellent company with many strengths and the only weakness is inherent to all mREIT companies. If you were planning on buying into them I see no reason not to, sure you could have gotten a better buy-in 6 months ago but who cares...just buy when the stock drops due to dividend payout and follow the stock with a keen eye on the central bank.
Turbo-Charge Your Position In American Capital Agency For Free [View article]
If bullish Why would you bother selling the put for a return of 2.50 when you you could just hold the stock and make exactly the same in dividend? On the other side, again why hold the call and give up the dividend? With high return stocks like the mREIT it is often not in a bulls best interest to hold the options, they loose too much in dividend. This strategy is bunk.
A Great Way To Make Money With American Capital Agency [View article]
How will rising interest rates affect the price of this stock?
As interest rates rise AGNC will be forced to pay more for the loans. You need to understand that they are highly leveraged and interest rates take a large toll on profits from them. This is a condition inherit to most REIT's. Think of it like buying and flipping houses. As interest rates rise you have to shell out more per month while you wait for the investment vehicle to increase in value. The principal payment is a fixed cost and recoverable the interest is not.
A Great Way To Make Money With American Capital Agency [View article]
Yes, I'm well versed in options. But the div payout is per share as is the option payout, so it makes no difference if we call it .57 vs 2.50 or we call it 57.00 vs 250.00 apples to apples...
Really, a guy could do well just running it on margin if nothing else. Most margin rates are in the 7-9% and with the stock payout at 18% you'd only have to boil out 1/2 the cost of the stock, margin the other half and bank the div less the margin interest and get to keep any capital the stock generates on its own merit.
Options are great, really great for a lot of plays, mostly on high volatility stocks/funds and on low div payers. But on a play with an REIT you are most times money well ahead running a stock play over an options play. Just make sure you do not get married to the position.
A Great Way To Make Money With American Capital Agency [View article]
Hmmm...would it not be a better move to either hold the stock (since there will be a 2.50 ((1.25+1.25)) pay out (2 qtrs) via dividend over the 0.57 spread payout? If you are concerned the stock will fall but want to collect the div. anyhow why not run a covered call? I'm all for options, the general payout is most often more than the stock in terms of percent gain, but with it paying out 5.00 a year on a 30.00 stock, its hard not to just hold the position.
Do Not Panic Out Of American Capital Agency [View article]
Do Not Panic Out Of American Capital Agency [View article]
Do Not Panic Out Of American Capital Agency [View article]
American Capital Agency: Look Elsewhere For Bargains [View article]
Turbo-Charge Your Position In American Capital Agency For Free [View article]
A Great Way To Make Money With American Capital Agency [View article]
A Great Way To Make Money With American Capital Agency [View article]
As interest rates rise AGNC will be forced to pay more for the loans. You need to understand that they are highly leveraged and interest rates take a large toll on profits from them. This is a condition inherit to most REIT's. Think of it like buying and flipping houses. As interest rates rise you have to shell out more per month while you wait for the investment vehicle to increase in value. The principal payment is a fixed cost and recoverable the interest is not.
A Great Way To Make Money With American Capital Agency [View article]
Really, a guy could do well just running it on margin if nothing else. Most margin rates are in the 7-9% and with the stock payout at 18% you'd only have to boil out 1/2 the cost of the stock, margin the other half and bank the div less the margin interest and get to keep any capital the stock generates on its own merit.
Options are great, really great for a lot of plays, mostly on high volatility stocks/funds and on low div payers. But on a play with an REIT you are most times money well ahead running a stock play over an options play. Just make sure you do not get married to the position.
A Great Way To Make Money With American Capital Agency [View article]
I am long AGNC