Hatteras Financial (HTS) is trading down $1.12 to $26.55, as the mortgage Real Estate Investment Trusts get slammed on US debt default fears Friday. Mortgage REITs invest some of their assets in mortgage securities guaranteed by the government agencies. Annaly Capital is the largest mortgage REIT (also see today’s NLY color). Meanwhile, HTS plummeted to a new 52-week low of $23.80 early and is now 11.6 percent off its worse levels. However, defensive trading continues and implied volatility in HTS options is sharply higher. 8,170 puts traded and 3,310 calls traded in the name so far. Aug 20, 25 and 26 puts are the most actives and implied vols have rallied more than 100 percent to 31.5.