AGNC pays 13.31% dividend. What’s more interesting is this is also a weekly option stock with high liquidity.
I wrote a covered call of AGNC with a net debit of 23.58 for a call strike of 24 (exp. Sept 27th). With 8 days to expire, its annualized return is ~80% [(.42/23.58 x 100% / 8 (days) x 365 (days) = 81.2%]. The actual annualized return is more like 270%, since the margin requirement is only 30% for AGNC.
I plan to keep this stock for longer term (to receive dividend). So I’ll do a credit spread when the option expiration nears.
9/26/13
Most (70%) of my agnc options were exercised today (obviously the call buyer wanted to received dividend, since today is the ex-dividend day), including the calls that expire in Oct which still has a sizable time value. Not surprisingly, AGNC went down about $0.80 at the open today b/c AGNC goes ex-dividend today.
