Closing Trade : FCX

Stock / Symbol: Freeport-McMoran / FCX

Option Strategy: calendar call spread w/ protective call
Trade entry date: Apr 19, 2011
Price at entry point: $51.68
Price at this post: $43.20

Current Position:

Long 2 FCX Feb12 40 Calls
at an effective cost of $2.96 per contract
+
Long 1 FCX Jan12 45 Call
at a cost of $3.13 per contract

Reasoning: For a trade that has essentially gone against us from the get go, we're going to capitalize on FCX's recent run up and close out the trade now for a slight loss. While an 8.6% loss isn't great, it's certainly better than the 16% the stock has dropped in the same time frame.

Closing Trade Details:

STC 2 FCX Feb12 40 Calls
for a credit of $4.10 per contract (GTC, limit order)
+
STC 1 FCX Jan12 45 Call
for a credit of $0.24 per contract (GTC, limit order)

Max Risk: $903
Max Profit: unlimited
Profit Range: $43.90 by Jan 20
Profit / Loss upon fill: ($78) or -8.6% (pre-commission)

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