ADAM goes into today's print with the call-heavy options skew from yesterday intact — but the broader mortgage REIT sector is sending mixed signals that sharpen the stakes.
Options positioning remains the dominant story heading into the release. The put/call ratio edged up slightly to 0.11 from yesterday's 0.09, but it stays well below the 20-day average of 0.13 and near the lower bound of the full 52-week range of 0.04–0.38. That is still an unusually call-heavy book for a mortgage REIT on earnings day — options traders continue to lean toward upside rather than protection. The z-score of -0.76 confirms the skew is meaningful, not noise.
The peer backdrop is worth noting because it diverges from ADAM's recent trajectory. RITM jumped nearly 6% on the day and almost 7% on the week, while NLY and DX also gained. and dropped. ADAM closed at $8.65, down 0.7% on the day and off 9% over the past month — underperforming the stronger names in the group. That divergence means the print lands while ADAM has been a relative laggard, even as parts of the mortgage REIT space have caught a bid.
Short interest is unchanged in character from yesterday: 3.3% of the free float, around 3 million shares, with borrow availability extraordinarily loose at roughly 1,256% — more than twelve shares available for every one currently borrowed. Cost to borrow has fallen sharply, down 44% on the week to just 0.29%. The lending market carries no squeeze pressure whatsoever. The short score of 38.5 sits in the lower half of its range, consistent with a position that is building modestly but not pressing hard.
The fundamental setup gives the bulls something to work with. ADAM's economic return surged 121 basis points to 462bp last quarter, the dividend rose to $0.23, and the P/E has compressed to roughly 7.9x with price-to-book below 1 at 0.87x. The EPS surprise factor score ranks in the 91st percentile, a consistently strong beat history. The bear argument centres on rate sensitivity: potential Fed cuts create prepayment and reinvestment headwinds that could erode net interest spreads even as book value improves.
Today's print will test whether ADAM's economic return momentum and dividend growth are enough to close the gap with stronger-performing mortgage REIT peers — or whether rate-path uncertainty keeps the discount in place.
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