Today, 12/19/11, I sold 4 FCX Jan12 $41.50 Covered Calls in my Taxable Account and 2 IRA Accounts for a net deposit of $96.96.  My basis for these FCX shares is now $38.30, 36.51 and 38.85 respectively.  These transactions represents a simple return of about .68%, .60% and .57% with annualized returns of about 7.76%, 6.89%, and 6.48% respectively on my prior basis with 32 days to expiration.  If called away, which is my goal; I will realize a total net profit of about $1,405.44 across the three accounts.

As I have noted before, I have made similar trades on FCX recently, some of which were assigned as desired, while some were not which allowed me to sell new options.  In this case, the Calls I sold on these FCX shares expired last week allowing me to sell new Covered Calls on them.  I would have preferred selling the weekly Covered Calls as in the past but FCX is down enough that I could not get a decent premium at my desired strike price.

S&P continues a 12-month price target of $48 and a Buy recommendation.  MarketEdge has a lower price opinion of $39.73 with a Long opinion.  The 18 Yahoo Analysts currently have a 12-month price target of $52.94, up slightly from $51.94 last week and continue a recommendation of 1.8; on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

At the risk of repeating myself, I actually like FCX and would like to own more of it.  However, I am using these shares as a trading vehicle in an attempt to generate cash flow more quickly.  Even as I make those comments, I realize that I in fact own more of it. 

Today, 12/12/11, I sold 1 FCX Dec11 $40 Covered Call for a net deposit of $20.24 in my taxable account.  My basis for these FCX shares is now $39.38.  This transaction represents a simple return of about .51% and an annualized return of about 46.57% on my prior basis with 4 days to expiration.

My December 9, 2011 $40 Covered Calls on these shares expired worthless last Friday making this the second time I have sold a weekly Covered Call on them.  Actually, it is the regular December monthly expiration but the idea is the same.

I continue to sell weekly Covered Calls on FCX with the belief that I will gather cash faster than my normal methods.  Normally I like to hold FCX, collect the dividends and sell Covered Calls on it.  In this case, I hope to gather option premiums while selling Covered Calls slightly in or out of the money with the goal of the stock being called away allowing me to repeat the cycle with the same or another stock.  This has not worked out quite as I thought because FCX retreated from my target strike price and I still own the shares.  On the other hand, FCX is volatile enough that I am still making money selling Covered Calls on it.  On occasion, I have even collected some unexpected dividends because I held the stock through the ex-dividend date.

S&P continues a 12-month price target of $48 with a Buy recommendation.  MarketEdge currently has a price opinion of $39.73 and has upgraded the stock to a Long recommendation.  The 18 Yahoo Analysts have a 12-month price target of $52.83 and a recommendation of 1.8 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

I actually like FCX and would like to own more of it.  However, I am using these shares as a trading vehicle in an attempt to generate cash flow more quickly.  Even as I make those comments, I realize that I in fact own more of it. 

Today, 12/5/11, I bought 100 shares of FCX for a net cost of $40.51 per share and STO 1 FCX December 9, 2011 $40 Covered Call for a net deposit of $93.24 in my taxable account.  My basis for these FCX shares is now $39.58.  This transaction represents a simple return of about .35% and an annualized return of about 32.10% if the stock is called away.  If the option expires worthless this transaction represents a simple return of about 2.30% and an annualized return of about 209.66% with 4 days to expiration.

I continue to be enamored with these weekly Covered Call options.  My December 2 $37 strike Calls on FCX in this account resulted in the shares being called away and generating me a total profit of $231.22 in about 7 weeks on an initial investment of about $3564.  I also captured a $25 dividend during that period.

If my current FCX shares do not get called away this Friday I will be able once again to sell new Covered Calls either slightly in or slightly out of the money to gather additional premiums.

S&P continues a 12-month price target of $48 a Buy rating on FCX.  MarketEdge has a price opinion of $39.30 and a Neutral opinion.  The 18 Yahoo Analysts have a 12-month price target of $52.83 and a recommendation of 1.8 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.