Apollo Residential Mortgage Inc (NYSE:AMTG) and its new options

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Dallas, Texas 09/10/2013 (Financialstrend) – Last week some new Apollo Residential Mortgage Inc (NYSE:AMTG) options became available for its investors with a 19 October Expiration. Here is one put-contract that is particular interest.  The put-contract at the $15.00 strike-price currently has an 80 cents bid. If an investor were to sell to open that particular put contract, they would be committing to buy the AMTG stock at $15.00.

However, they will also collect a premium. Effectively, this puts the cost-basis of the company’s shares at $14.20 (before the broker commissions). To an investor who is already interested in buying AMTG shares, this proves to be an attractive option to paying a price of $15.18/share today.

About the company

Apollo Residential Mortgage Inc (NYSE:AMTG)is essentially a holding company. It conducts its business largely via ARM Operating and some of its other operating subsidiaries. It is a residential real-estate finance company that has investments in residential mortgage-assets in the U.S. AMTG invests in various residential mortgage-backed securities that are either issued or guaranteed to principal and/or interest by any federally-chartered corporation like Fannie Mae or an agency of  the U.S Government, like Ginnie Mae.

Their underlying-collateral includes adjustable rate mortgages, fixed-rate mortgages, and inverse interest-only and interest-only securities. These are collectively called Agency Derivatives. AMTG also invests in RMBS that have not been guaranteed or issued by the U.S government Agency. The company assets for targets for investment such as Non-Agency RMBS, residential mortgage loans Agency RMBS as well other residential-mortgage assets.

Friday’s trading

In Monday’s trading session, Apollo Residential Mortgage Inc (NYSE:AMTG) rose by 1.67%. The opening price of the shares was $15.08 which touched an intraday high of $15.28 and closed at $15.26. More than 0.203 million shares were traded on Monday and the average volume of shares traded over 30 days was 0.519 million. The company has a market capitalization of $488.89 million.

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