Today, 5/7/13, I BTC 3 FCX May13 $30 Covered Calls and STO 1 Jan15 and 2 Jan14 Calls for a net deposit of $125.40 in two accounts.  The details follow.

I rolled 1 May13 $30 contract to a Jan15 $38 contract in my Taxable Account for a net deposit of $76.47.  These transactions represent a simple return of about 2.19% and an annualized return of about 1.29% on my prior basis.  With the increased strike price, the simple return is about 25.08% and the annualized return is about 14.76% on my prior basis.  Dividends received are excluded from both return calculations.

I rolled 2 May13 $30 contract to Jan14 $34 contracts in an IRA Account for a net deposit of $48.03.  These transactions represent a simple return of about .79% and an annualized return of about 1.12% on my prior basis.  With the increased strike price, the simple return is about 13.66% and the annualized return is about 19.48% on my prior basis.  Dividends received are excluded from both return calculations.

I originally purchased these shares for the purpose of selling close to the money weekly Calls so they could be called away for a slight profit.  Somewhere along the way, my plan broke down.    So…now, I find myself selling much farther out so the shares are not called away below my basis.  Now, if I am called away I will make money on all of these shares above my original purchase price.

FCX pays a decent dividend of .3125 per quarter for a yield of about 3.96 at the current price.  I normally find that I can sell Puts and Calls on FCX to add to the dividend on a fairly regular basis.  Except that is not working for me right now.  If FCX falls back below $30 I may be able to roll these contracts in and down for some additional cash flow but I am not holding my breath on that with the market charging up as it is.

S&P has a 12-month price target of $23 and a Sell recommendation.  MarketEdge has a price opinion of $31.13 and has a Neutral opinion on FCX.  The 14 Yahoo Analysts currently have a 12-month price target of $37.14 and a recommendation of 2.3 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 4/23/13, I sold 3 FCX May13 $30 Covered Calls in two accounts for a net deposit of $93.70.  There are 25 days to expiration.  The details follow.

I sold 1 in my Taxable Account for a net deposit of $29.23.  This transaction represents a simple return of about .83% and an annualized yield of about 12.10% on my prior basis.  My basis for these shares is now $34.95.

I sold 2 in an IRA Account for a net deposit of $64.47.  This transaction represents a simple return of about 1.03% and an annualized yield of about 14.99% on my prior basis.  My basis for these shares is now $31.07.

I would have preferred to sell the weekly Calls but with only 4 days left to expiration and the lower stock price there was just not enough premium as a strike I was willing to sell.  FCX took a big hit earlier in the month.  I think the reason was mostly because of reduced Chinese GDP and near term outlook for copper in general.  I am underwater at my current strike price so I will roll out and up if possible if necessary.

FCX pays a regular .3125 quarterly dividend that equates to about a 4.38% yield at the current price.  I like the dividend and am happy to collect it for now.

S&P has a 12-month price target of $23 on FCX with a Sell recommendation.  MarketEdge has a price opinion of $31.92 and an Avoid recommendation.  The 14 Yahoo analysts have a 1-year price target of $39.07 and a 2.2 recommendation where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 4/15/13, I sold 2 FCX April 2013 $32 Covered Calls for a net deposit of $14.47 in an IRA Account.  My basis for these FCX shares is now $31.39.  This transaction represents a simple return of about .25% and an annualized return of about 17.93% on my prior basis.  There are 5 days to expiration.

I was assigned these shares last Friday via my $32 weekly Put.  I had expected to be selling a strike price above $32 but FCX, along with most of the market and the commodity stocks in particular, is taking a big hit today.  I considered selling a higher strike a little further out but decided to go ahead and sell these.  I suspect that the sell off may be overdone and I want to be able to sell Calls on these shares again next Monday, perhaps at a higher strike.

I already own 400 FCX shares in various accounts. I own 200 with Jan14 $40 strike Covered Calls, 100 with an Apr13 $37 Covered Call and 100 with a Jan14 $42 Covered Call.

FCX pays a good dividend at .3125 per quarter for a yield of about 4.26% at the current price.  With the option premium and the opportunity for capital appreciation, I think FCX provides a decent cash flow.

S&P currently has a 12-month price target of $31.92 and a Sell rating on FCX.  MarketEdge has a price opinion of $31.92 and an Avoid recommendation.  The 15 Yahoo Analysts have a 12-month price target of $39.93 and a recommendation of 2.1 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.