Discussion of Options
Preference for more open interest and more volume
Rather than the previous purchase of the June Calls, let us take the tact of purchasing the December Calls
instead. Notice the higher volume and high delta price movement.
Here are the Greeks for the DEC options in AGNC as of Friday December 10, 2010 close. I matched the
$27.5 CAL price as closely as I could. Again, you will notice that the stock is not acting in a Black-Scholes
If 8 million shares are being added to AGNCs current 52.2 million shares on the December 14th date and
they were priced at $27.375 each and the previous market value was $29.85 per share then the new value
would be $29.52 per share. This could be more because the $29.85 price may have been low because of the
anticipation of the shelf offering becoming manifest before the ex-dividend date. Personally, I didn't
suspect at all that they would offer shares at $27.375 followed by an additional bonus of a $1.40 dividend.
Calculations for the last paragraph above:
AGNC $27.37 8.0 million shares = 218.96
$29.85 52.2 million shares = 1558.17
$29.52 60.2 million shares = 1777.13