Quick update, on our AGNC trade exit just before the close on May 21st (yesterday). Like we stated there was significant event risk for mortgage REITs today with Ben Bernanke’s speech at 10am.
There would have been significant volatility in the position, and it would have been down a few hundred dollars during the morning spike (see chart). In the end we were proven wrong, and would have made money if we had held on to the close, then closed out the position a day later. However it probably wasnt worth the risk of AGNC running higher, for the limited gain.
We are a little fixated on getting our $100 back that we lost on this trade, but AGNC looks like technically it could go a lower relatively quickly. Looks like the lowest close since March 2012. So we’ll keep an eye on it for now, and probably add the same style of put spread trade at lower levels in a few days or a month or so.