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) – EXPIRATION
EXPIRATION of the Freeport McMoRan (FCX) June $32-$35 vertical BULL CALL spread at $3.00
Opening Trade
6-16-2023
expiration date: June 16, 2023
Portfolio weighting: 10%
Number of Contracts = 40 contracts
Just to be clear, this position does not expire until 4:15 PM at the Friday June 16 option expiration. Since I don’t want to overwhelm you with expiration trade alerts all at once, I am feeding this one out now.
However, with the stock now an eye-popping 15.42% above its nearest strike price, I think it’s safe to call this one a win.
As a result, you get to take home $1,400 or 16.00% in 10 trading days. Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Tuesday morning June 20 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
This was a bet that the (FCX) would not fall below $35.00 by the June 16 option expiration in 10 trading days.
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), 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 is the specific accounting you need to close out this position:
EXPIRATION of 40 June 2023 (FCX) $32 calls at…….....…$8.40
EXPIRATION of short 40 June 2023 (FCX) $35 calls a……$5.40
Net Proceeds:…………………….………..………............….….....$3.00
Profit: $3.00 - $2.65 = $0.35
(40 X 100 X $0.35) = $1,400 or 16.00% in 10 trading days.
