Fannie Mae-No Politics (FNMA)

[kthomp19]

If you're expecting such a sizable haircut, would you sell off a large part of your positions if this reaches ~50% PAR before release happens?

I will certainly sell some if they hit 50% of par before the election. The combined possibilities of a significant haircut if Trump wins and a big drop in price if he loses would make it hard for me to hold on to my entire position.

My plan was to sell off about 20% once this goes to ~50% PAR, although that isn't because of the haircut but rather the time opportunity cost and de-risking. The only reason I'm not selling more is because of tax considerations.

For me it depends on if it happens before or after the election. If Trump wins and the juniors trade at 50% of par, I will likely hold on to a good amount because I think speculation will push them even higher.