When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (FCX) – TAKE PROFITS
SELL the Freeport McMoRan (FCX) May 2024 $42-$45 vertical BULL CALL spread at $2.95 or best
Closing Trade
4-29-2024
expiration date: May 17, 2024
Portfolio weighting: 10%
Number of Contracts = 40 contracts
I am going to take advantage of the ballistic, straight-up move in copper prices over the past week. With 90% of the maximum profit in hand, the risk-reward of continuing for 14 more days is no longer favorable.
A gigantic short squeeze in global copper supply is developing and I will be back in this name on the next dip as well as other copper names.
If you can’t do options, buy the stock. My long-term target for (FCX) is $100, up from today’s $44.11. (FCX) is the world’s largest copper producer.
Please remember that I told you earlier that each Tesla needs 200 pounds of copper, and that Tesla sales could reach 2 million vehicles this year. The ten-year target is 20 million cars a year.
Therefore, I am selling the Freeport McMoRan (FCX) May 2024 $42-45 vertical BULL CALL spread at $2.95 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
As a result, you get to take home $1,800 or 18.00% in 15 trading days. Well done, and on to the next trade.
If you are looking for other copper plays, please take a look at the United States Copper Fund (CPER), First Quantum Minerals Ltd. (FM.TO), Antofagasta (ANTO.L), and hang on. We are going much higher once the stock market bottoms.
I have a feeling that Freeport McMoRan is my new rich uncle, cutting me generous but undeserved maintenance checks every month.
Here are the specific trades you need to exit this position:
Sell 40 May 2024 (FCX) $42 calls at………….……............…$10.00
Buy to cover short 40 May 2024 (FCX) $45 calls at….………$7.05
Net Proceeds:………………………….………..………….........….....$2.95
Profit: $2.95 - $2.50 = $0.45
(40 X 100 X $0.45) = $1,800 or 18.00% in 15 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
