Annaly Mortgage (NLY) gapped down and is off 54 cents to $17.34 after the company announced an offering of convertible senior notes. Shares sank on the news and options volume is running 4X the average daily. 26K puts and 15K calls traded so far. While Jan12 7.5 puts are the most actives, some investors appear to be using the weakness to inititate bullish trades in Feb and Mar 18 calls. In fact, prior to the announcement this morning, FBR analysts were out with positive comments on NLY, saying they’re buyers at current levels, with the stock trading at 1.05X book and offering a 16.5 percent div. yield.
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Annaly Capital Management Inc (NLY) $17.33 -3.08%
Posted on February 9th, 2010 2:13 pm
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4 users commented on " Annaly Capital Management Inc (NLY) $17.33 -3.08% "
Follow-up comment rss or Leave a TrackbackDid you see the yield on Invesco’s reit? IVR? 20%…..I might, but not brave enough myself. Tempting soon as it gets closer to ex-divi.
Just playing it safe and setup a synthetic long on IVZ on the 17.5 july line….really low beta.
Seems dicey. There’s usually a reason for huge dividend yields.
Not necessarily. I’ve owned some NGAS pipeline partner plays aka MLPs (i.e. ENB) and AGNC.
They all held up well.
Of course ENB was was in the DNR aquistion so it was almost a guarantee on the price and yield….
That being said. On NLY, I agree. I thought about simply collaring it for the divi with LONG term leaps (2011/2012)…..but forget how far they go out now.
MO you could do the same thing, but I usually wait on long term leaps til the bid/ask narrows a bit.
Sry, duh, meant enp, not ENB, but…that divi all depends on natty gas holding up…
http://www.finviz.com/quote.ashx?t=enp&ty=c&ta=1&p=d
and DNR as well.