Stock / Symbol: Freeport McMoran / FCX
Option Strategy: [private_monthly]calendar call spread[/private_monthly]
Trade entry date: Mar 19
Price at trade entry: $39.78
Price at this post: $38.48
Current Position
Long 4 FCX Aug12 42 Calls
Short -4 FCX Apr12 42 Calls
at a cost of $1.80 per contract
Reasoning: With FCX due to report earnings tomorrow morning, it is prudent to either exit our position or protect it. We're opting to protect it. As we're made nearly 100% on the short calls, we're going to buy them back here. Then, for protection, we're going to purchase a single April expiration 42 strike put. On friday, we'll either close out the trade for a relatively small loss, sell more near term calls and/or add another calendar, or close out for a profit with FCX trading over $40.50.[/private_monthly]
Trade Details:[private_monthly]
BTC -4 FCX Apr12 42 calls
for a debit of $0.05 per contract (day order, limit order. IMPORTANT, if you're not filled by 3pm EST, close at the Ask)
then,
BTO 1 FCX Apr12 42 put
(at the Ask price less $0.05 )
Max Risk: $1100
Max Reward: unlimited
Max Loss: ($120) @ $36
Profit Range: $39.75 + on Apr 20
Suggested upside stop: NA
Suggested downside stop: NA
[/private_monthly]
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