Today, 8/27/10, I sold 1 FCX Nov10 85 Covered Call for a net deposit of $100.22 in an IRA account.  My basis for these FCX shares is now 85.48, excluding dividends received.  This transaction represents a simple return of about 1.16% and about 5.02% annualized on my basis.

S&P currently has a 12 month price target of $95 on FCX.  I feel pretty comfortable selling the November $85 strike.  If necessary I think I will be able to roll the Call up and out without too much difficulty.

I like FCX and would like to own more of it.  To that end I have also sold a Nov10 75 Put on FCX which I have written about in earlier posts.  That Put is currently underwater but my basis on it would be 66.82 if assigned to me.  Even so, I may end up rolling that Put out and possibly down as I did near the end of April.  I want to own more but as cheaply as possible. 

As I noted in an earlier post, FCX has doubled its dividend to .30 per quarter.  I am really pleased to see that as dividends are one of the major reasons for me to own any particular stock.  I fully expect that FCX will continue to raise its dividend over the next few years as the world economy continues to improve.

Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends occur on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $4.476.52 in dividends in my various accounts for 2010.  My year to date average monthly dividends received is currently $559.52.  The year-to-date dividends currently represent 28.80% of my monthly investment cash flow and 1.82% return on my current basis value.

So far during August, I have received notice of the following dividends paid in various accounts for a total of $189.00:

I use my basis per share to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio.  My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.  I calculate my basis per share as my acquisition price less any option premiums received on those shares.  I do not use dividends to reduce my basis.

Today, 6/1/10, I STO 1 FCX Aug10 85 Covered Calls for a net deposit of $98.21 in an IRA account.  My basis for these FCX shares is now 86.48.

FCX is down more today along with the S&P although the DOW and NASDAQ are up as I write this.  The price of Copper and what China appears to be doing seem to have the greatest impact on the share price of FCX.

I like FCX and would like to own more of it.  To that end I have also sold a Nov10 75 Put on FCX which I have written about in earlier posts.  I may end up rolling that Put out and possibly down as I did near the end of April.  I want to own more but as cheaply as possible.

I should note that FCX has doubled its dividend to .30 per quarter.  I am really pleased to see that as dividends are one of the major reasons for me to own any particular stock.  I fully expect that FCX will continue to raise its dividend over the next few years as the world economy continues to improve.