Fannie Mae-No Politics (FNMA)

[kthomp19]

Both Commons and Preferreds will be green tomorrow as well as the day afterwards.

Trump will slay the New Hampshire Primaries.

I agree on both points.

The FNMAS:FNMA ratio usually oscillates around 3.5:1. I expect it to continue to do so until the election, and I also expect both series to trade higher. FNMA tends to be more volatile but for a pre-election trade I don't think it matters much whether one owns the juniors or commons.

The point at which recap/release happens is when I expect there to be a 75% chance of a big divergence.

I'm glad I covered my FNMA short at only a minor loss. There is no way I would want to be short the common before the election.