Buy Call FCX

June 13, 2024
Sell your FCX November 46/70 Bull Call Spread for $5.25 or more

As I’ve written recently, the market continues to send very mixed signals. On the one hand, the Nasdaq and S&P 500 look rock solid as the indexes soar to new highs. However, most of that rally can be attributed to AAPL/NVDA and a smaller and smaller list of the best-performing stocks.

Also, under the surface, the market breadth has been dreadful for weeks, and more and more stocks are chopping around or breaking down. This is concerning (at least for now).

Because of this choppy environment, and FCX and GDX losing their momentum as of late, let’s exit our successful FCX position, as well as our GDX trade that is mostly a breakeven after our initial sale weeks ago.

To execute these trades you need to:

Sell to Close your FCX November 56 Calls

Buy to Close your FCX November 70 Calls

And

Sell to Close your GDX January 33 Calls

Buy to Close your GDX January 50 Calls

Stepping back, hopefully the under-the-surface selling that we are seeing will be a short-lived situation and breadth improves. However, until we see that happen, let’s raise some cash and prepare to move this capital into fresher ideas.

April 30, 2024
Adjust Existing Position: Against FCX November 46 Calls, Sell the November 70 Calls for $1 or more.

FCX has been on a solid run as of late, and the stock is within striking distance of its recent highs. Let’s take advantage of this strength to sell an out-of-the-money call, to lower our cost basis.

To execute this trade you need to:

Sell to Open the November 70 Calls

After this adjustment our position will be a bull call spread that looks like this:

Long FCX November 46 Calls

Short FCX November 70 Calls

The call sale will be a mistake if FCX trades well above 70 on November expiration. However, that is a scenario we can live with as the stock will have rallied another $19 by then, and our bull call spread will be worth $24.

Finally, even though we are selling a call today, there is no question this position is still bullish.

April 12, 2024
Freeport McMoRan (FCX) Earnings

Tomorrow before the market open, Freeport McMoRan (FCX) will report earnings. Headed into the announcement, we are holding a final third of a position having taken partial profits twice as the stock moved higher.

With profits in the bank and option activity remaining bullish, I am going to hold my position through earnings.

However, if you would prefer to not take the earnings risk, you must sell your position before the close of trade today (for an approximate profit of 30%).

FCX – With the stock trading at 49, the options market is pricing in a move of $2.50 this week, or 46.5 to the downside and 51.5 to the upside.
Open interest is skewed bullish on a ratio of 1.7:1 call vs. put.
Skew is pricing in typical downside risk as well as upside potential.

April 12, 2024
Sell a Third of your FCX November 46 Calls for $9.30 or more.

FCX stock continues to break out, and option activity is very bullish. And while I think odds favor this stock going higher, commodity plays are tricky. For that reason, and because we have a profit-taking system in place, today we are going to lock in a gain of approximately 60% on a piece of our position.

To execute this trade you need to:

Sell to Close a Third of your FCX November 46 Calls

April 2, 2024

Sell a Third of your FCX November 46 Calls for $7 or more

FCX is breaking out to a new high today and looks great. On the other hand, after weeks of churning, the overall market is starting to bleed lower. Because of that, and because we are going to stick to the system, let’s lock in a profit of approximately 20% on a third of our position and then go for much greater gains in the weeks to come.

To execute this trade you need to:
Sell to Close a Third of your FCX November 46 Calls

As noted above, I think FCX looks great and I like the prospects for the balance of this trade moving forward.

March 21, 2024
Buy the Freeport McMoRan (FCX) November 46 Calls (exp. 11/15) for $6.35 or less.

Freeport McMoRan (FCX) and its copper and commodity peers have been on a nice run in the last three weeks while the market has drifted higher/chopped around. And with that recent strength for FCX and its peers, option activity has been very strong, especially in FCX, including these trades the past two days:

Today – Buyer of 3,100 Freeport McMoRan (FCX) August 50 Calls for $2.73 – Stock at 45.5

Wednesday – Buyer of 4,000 Freeport McMoRan (FCX) May 46 Calls for $2.10 – Stock at 44.5

Wednesday – Buyer of 25,000 Freeport McMoRan (FCX) May 50 Calls for $1.42 – Stock at 46.

Today let’s add an FCX November call position that should work if the commodity theme continues to gain momentum.

To execute this trade you need to:
Buy to Open the FCX November 46 Calls.

The most you can lose on this trade is the premium paid, or $635 per call purchased.

The risks I see in this trade are general market risk, and of much greater concern to me, how hot, but also how cold, commodity stocks can get if the momentum fades.

And while it’s possible that we are near a top in FCX, it is as likely, or even more so given the strong option activity, that FCX is just getting started to the upside.