October 17th, 2008 at 10:53 am
I’ve been out of town and away from my computers for several days so I have some catching up to do in the next several posts.
On 10/8/08, I was assigned 2 FBR Jan09 10 Puts in an IRA account. My basis for these shares is 8.81.
FBR is a mortgage REIT. The stock is trading at .55 as I write this so this is not a great stock for me. Furthermore, the only options available are for Jan09 and Jan10 so I am left with the choice of holding and waiting to see if FBR recovers or just selling it and taking the loss. I will wait to hear the conference call on 10/23 before I make a decision. Right now I am leaning toward just selling and moving on.
July 28th, 2008 at 12:53 pm
On Friday (7/25/08), I sold 53 FBR Jan09 2.50 Covered Calls for a net deposit of $1245.25 in my taxable account and 4 IRA accounts. My basis for FBR ranges from 8.40 to 9.26 per share including option premiums but excluding dividends received.
As you can see, I am way underwater on FBR. It is shaping up to be my biggest loss ever.
My last FBR calls expired in Jun08. I held off selling new calls to now because I wanted to wait after the conference call last week. In the prior conference call FBR executives said they would be evaluating restarting the dividends during the quarter just ended. Since there was no dividend announcement I decided to go ahead and sell the covered calls. Right now the only next covered call available is for Jan10. I presume the Jan09 calls will expire worthless but will need to see how the financial winds are blowing before I decide what to do after that.
June 24th, 2008 at 7:13 pm
As you may have noticed in my prior post I own a considerable number of FBR shares, 5200 to be exact. As I look at that number I am not really sure how it got so large. I know it is because I was assigned them (most at $10 - it is currently trading under $2 with my basis around $8 right now, excluding prior dividends) but I can’t say why I let the number get so large. I was not keeping this blog diary back in the days when I sold the puts. I do know that one of my investing advisor sources (which I pay for) was very high on FBR a couple of years ago. They exited it awhile back though.
In any case, I am waiting before I make any decisions on FBR, including selling new Covered Calls, until after FBR announces its 2nd quarter results on July 24. I actually want to hear the conference call first. In the conference call for the 1st quarter results the company said that it would be evaluating during this quarter when it could resume paying dividends. FBR posted a 1st quarter profit beating expectations. I am hoping it will do the same for the 2nd quarter with a resulting jump in price. I am also hoping that they will resume the dividends or at least suggest when they might do so.
