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Vampyroteuthis infernalis

Vampyroteuthis infernalis
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  • Short-Selling Daily Leveraged ETFs: Some Practicalities To Consider [View article]
    @Concretejungle, it's been about a year now, did the trade work out like you expected ?
    Mar 25 11:07 AM | Likes Like |Link to Comment
  • Short-Selling Daily Leveraged ETFs: Some Practicalities To Consider [View article]
    Likely the expected decline (aka slippage) will be very close to the interest rate that is charged by brokers to borrow shares for shorting long term, which at the time of the original article was about FAZ 7% according to swedish and the PDF article someone else posted mentioned about 9% historical slippage. So the premium that it costs to buy your PUT should be calculated near to the current expectations of slippage.

    If you wanted to guess where TZA might go under these levels, we would need to know how much IB charges people to borrow shares currently. Then we could compare how much premium those puts are costing you.

    EDIT: I may have made reference to another article by Swedish Speculator, if you want to know more go into Swedes profile and look for his other article on 3x shorting and you will find the historical slippage PDF I was talking about.
    Jun 13 05:18 PM | Likes Like |Link to Comment
  • How To Beat Leveraged ETF Decay [View article]
    For sure you can. Maybe even offset the decay with a put sell and get paid to enter the position. For instance this is my version of a 3x GDX play.

    Buy 3 GDX $30 2015 CALL LEAPS --- $450 @ ask - $1350
    Sell 3 GDX $30 2015 PUTS --- $655 @ bid - $1965

    Net credit $615 to enter the position, seems I'd lose less than a dime on the trade to "decay" over 20 months. (b/e is $27.95, current price is $27.87).

    Plus I wouldn't have to pay some manager 1.5% in fee's per year.
    May 23 04:53 PM | Likes Like |Link to Comment
  • American Capital Agency Corp.'s Upcoming Q1 Income Statement Estimation [View article]
    I believe the dividend is safe for the next few quarters.
    Apr 9 08:52 AM | 1 Like Like |Link to Comment
  • Warrants - Like LEAPs But Better [View article]
    Can the warrants be used as collateral for writing calls on the underlying or is that the advantage in leaps.
    Apr 1 10:10 AM | Likes Like |Link to Comment
  • American Capital Agency: Negative Catalysts Portend A Dividend Cut [View article]
    I wouldn’t expect full deployment of this capital until Q2 2013.

    @ punter, not necessarily, the theory I'll propose is that they could invest the money before they receive it by upping leverage a small amount for the week or two before the SPO is announced publicly, but while mgmt is privy to it's knowledge. At 8x leverage on 339MM shares, they would only need to raise leverage to 9.3x temporarily, allowing the secondary issue to generate profits beforehand. It wouldn't show on the 10-K because they only report the average leverage for the entire quarter, knowing full well that the SPO will dilute the average down before the reporting date.
    Mar 19 11:21 PM | 3 Likes Like |Link to Comment
  • Ocean Rig Trades 50% Below Book Value [View article]
    Ocean Rig Trades 50% Below Book Value

    "~50% below its $22/sh book. "

    The title of your article is misleading.They are not trading 50% below book, at $14-$15 per share they are only around 33% below book.
    Mar 19 10:36 AM | 5 Likes Like |Link to Comment
  • In Defense Of American Capital Agency [View article]
    Is that correct GetBeach, we just apply the GK ratio test before investing in any mReit, lets see how that plays out in the real world.

    CIM - has a zero Gary Kain ratio - it was a smart move to not invest.
    ARR - has a zero Gary Kain ratio - likewise, good to have avoided.
    AGNC - has at least one Gary Kain.

    Theory seems solid, the Squid abides.
    Mar 19 12:27 AM | 3 Likes Like |Link to Comment
  • In Defense Of American Capital Agency [View article]
    They earned $222 million UTI 4th qtr, so $128MM in 1st qtr is not implausible. If they show anything higher than $128MM in UTI this will officially be a non diluted SPO.

    Get my drift, I'll want to see $877MM UTI on the 1st qtr before I can say it was not diluted on a per share basis.
    Mar 18 12:35 AM | Likes Like |Link to Comment
  • In Defense Of American Capital Agency [View article]
    Al, probably was accretive in the book value sense of the word. But one could argue it will dilute the UTI which is a per share metric, likely by 18% with the over-allot. Keep that 18% dilution # handy, 'cause in May when they release the 1st qtr report, we will be able to deduce how much farther the book value actually fell, guessing a .018 cent gain in BV for every dime of accretion.

    For instance if BV fell to $31.55 on the next report, and the SPO was at $31.63, it likely fell to $31.53 and the SPO was accretive in gaining a penny or two of BV.

    But the same time, UTI which was at $744 MM with 338MM shares is now divided by the 396MM shares. That's dilution for sure, but of a different kind.

    I'm wondering if they were able to increase UTI by 18% 1st qtr prior to the SPO. They only needed about $128MM to offset the new shares. We won't know for 6 weeks.
    Mar 18 12:00 AM | Likes Like |Link to Comment
  • In Defense Of American Capital Agency [View article]
    AGNC is a winner.
    Mar 17 06:46 PM | 2 Likes Like |Link to Comment
  • American Capital Agency: Negative Catalysts Portend A Dividend Cut [View article]
    I believe Corvette is referring to a bear market for the REITS sector, not the market in general, reits did not do very well in 2005/06, back then NLY only paid about 1% per quarter. Those were better years to be invested in stocks.
    Mar 17 09:47 AM | Likes Like |Link to Comment
  • Want To Be An Above-Average Investor? Stop Trying To Time The Market [View article]
    ALG, in your case, with the VIX so low and your profits so high, you can afford to purchase PUTS to protect your gains without having to sell the underlying.

    If the stock market continues to rally, you lose the price paid for the PUTS, but gain on the long position and get a future tax write-off.

    If the market falls, your put gains are taxed when you sell-to-close, but the long position will be intact and the dividends will still accrue. You could even use the gains to buy more shares, increasing your position.
    Mar 13 01:38 PM | Likes Like |Link to Comment
  • Short-Selling Daily Leveraged ETFs: Some Practicalities To Consider [View article]
    I see where you are going, not $50 from today's prices, but $50 from post split price. Methinks you will not find a $100 FAS PUT after the split, because there is no $300 FAS PUT currently. Best you'll find is the FAS $235 / 78.33 strike, with a DELTA of .633.

    But not all bad news, the FAZ will have puts for you, but only because it has fallen so far since they were issued. The delta on the FAZ side is there, but is lop-sided against FAS because they do not have enough upper strikes to match FAZ. FAS $235 PUT (78.33 post split) is roughly equivalent to the FAZ $15 ($60 after split) strike in terms of delta. FAZ deepest put is 180% ITM, while FAS's is only 43% ITM.

    FAS = $163.28 = Highest PUT $235 = roughly 43% ITM - Delta .633
    FAZ = $15 PUT / $60 post split = Delta .636
    FAZ = $20 PUT / $80 after split = Delta .810
    FAZ = $25 PUT / $100 split = Delta .901
    FAZ = $30 PUT / $120 split = Delta .948 = @180% ITM
    Mar 13 04:28 AM | Likes Like |Link to Comment
  • Short-Selling Daily Leveraged ETFs: Some Practicalities To Consider [View article]
    Hi Concrete, it's not 5%, more like 15% is baked in as of last night.

    $165 FAS
    $215 strike JAN 2015 PUT = $7500 ($5000 ITM)
    2500 / 16500 = 15% premium.

    They charge Swedish just under 7% interest to borrow shares, so maybe you should look into both buying a PUT and writing a naked CALL, that would give you a much better synthetic short. The FAS $215 2015 NAKED CALL would pay you $1800 reducing the premium to about $700 per spread or 4.2%. Slightly better than just borrowing shares and paying interest, but you'll have major disadvantage when re-balancing an option position, the LEAPS have wide bid/ask spreads and you'll not be able to cost effectively sell a small portion of the winning side to purchase a small portion of the losing side.

    But then again, if you don't re-balance like you mention, it might introduce a greater risk by being so deep ITM when one sides goes against you more and more, while your winning side has diminishing returns.
    Mar 12 06:36 AM | Likes Like |Link to Comment
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