On 1/19/10, I sold 1 FCX Feb10 80 Put for a net deposit of $222.21 in an IRA account.  If Put to me, my basis in these FCX would be 77.78.

When I sold this Put FCX was trading around 84.  I certainly appeared that I had a lot of cushion in case the stock should pull back.  Then, almost immediately, FCX began to fall.  I fell to as low as 66.20 last Friday, 1/29.  Now, today, it has risen 4.90 to close at 71.59.  There are still 3 week before this option expires.  It may yet expire out of the money allowing me to realize the entire premium as a profit.

I already own 100 shares of FCX at a basis of 89.18 with a Feb10 90 Covered Call on them.  I was attracted to sell the Feb10 Puts when I saw that FCX has restarted paying dividends at .15 per quarter.  I am hopeful that the dividend will rise over the next few quarters and approach or reach its prior level of .50 per quarter.  My other reasons to sell the Puts is that I would like to own more of FCX as part of my core holdings and to reduce my average basis in the stock.