Understanding mREITs

C

clearinghouse

For stocks like NLY and AGNC, what are indicators I should pay attention to? The bond market? I don't quite understand what investors are looking at to push these things up or down. Can someone give me a hint or starting point to understand what pushes these assets up or down?

Thank you.
 
Investors burnt on stocks chasing yield piling into mREITs?

They work similar to banks or old-school mortgage companies, except they don't do any originations. They borrow short and lend long. Their risks are the yield curve and prepayments.
 
Quote from Traveler:

Investors burnt on stocks chasing yield piling into mREITs?

They work similar to banks or old-school mortgage companies, except they don't do any originations. They borrow short and lend long. Their risks are the yield curve and prepayments.
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So if I were designing some intraday trading system to buy and sell these things, would I look at interest rate products from the CME to price them properly?
 
I dunno. Maybe use one of the correlation tools to see what mortgage products track them the best? You'd have to do each one differently though. They don't all hold the same stuff, and they all hedge rates differently.

There is a bunch of stuff about them, especially Hatteras, on Seeking Alpha if you want to start there.
 
Quote from clearinghouse:

So if I were designing some intraday trading system to buy and sell these things, would I look at interest rate products from the CME to price them properly?
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I'm just curious on why you would want to trade these intraday? I don't follow AGNC much, but NLY is not exactly a mover and a shaker on short time frames.
 
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