Put volume surged in Anworth Mortgage Asset yesterday, but the
activity seems to be bullish.
Our tracking programs detected the purchase of more than 3,000
April 7 puts for $0.25 against open interest of 1,900 contracts.
The trades occurred in the final hour of the session at the same
time that stock volume spiked amid heavy buying.
The activity in both the puts and the equity suggests that
investors were building positions in the shares and using the
options as protection.
ANH ended the day up 1.44 percent to $7.05. It's been grinding
sideways in a range for more than a year but has started trading in
a tighter range since May, making higher lows and lower highs. Some
chart watchers may consider that kind of consolidation the prelude
to a move higher or lower.
The company is organized as a real-estate investment trust but owns
mortgage securities rather than properties. Its dividend yield is
about 13 percent a year, which seems quite high given how low
interest rates are in the bond market.
Most other companies in the sector, including Annaly Capital
Management and Chimera Investment, may appear undervalued to some
investors because they also pay big dividends but haven't
participated in the recent market gains.
The put buying drove total options volume in ANH to 23 times
greater than average yesterday.
I own CIM shares.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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