Trade Adjustment / New Trade Opportunity : calendar call spread w/ protective call

Stock / Symbol: [private_monthly]Freeport-McMoran / FCX [/private_monthly]

Original Option Strategy: diagonal call spread
Original Trade entry date: Apr 19th
Price at original trade entry: $51.68
Price at this post: $41.59

Position:[private_monthly]

Long 1 FCX Nov11 50 Call
for an effective cost of $5.50 per contract

[/private_monthly]

Update:
For those of us currently in FCX, we're going to roll the Nov 50 call into a Jan12 45 call & add a 40 strike calendar call spread. For those of you not currently in the trade, this is a good entry point. The new trade details will follow the adjustment.

Trade Adjustment Details:

STC 1 FCX Nov11 50 call
BTO 1 FCX Jan12 45 call
for a net debit of $2.40 per contract
then,
BTO 2 FCX Feb12 40 calls
STO 2 FCX Oct11 40 calls
for a net debit of $2.37 per contract

Risk Profile (accounting for existing position)
Max Risk: $1,260
Max Profit: ($195) @ $40
Profit Range: NA


New Trade Details:

BTO 2 FCX Feb12 40 calls
STO 2 FCX Oct11 40 calls
for a net debit of $2.37 per contract
then,
BTO 1 FCX Jan12 45 call
for a net debit of $3.25 per contract

Risk Profile (new position):
Max Risk: $470
Max Profit: $275 @ $40 for a 58.51% return by Oct11 exp
Profit Range: $37.90 +

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