Freeport-McMoRan Copper & Gold (NYSE:FCX) – which engages in the exploration, mining, and production of mineral resources — has been on a tear lately, moving up nearly 25% this year.
FCX closely tracks copper, which has been on a similar tear.
The company primarily explores for copper, gold, molybdenum, silver and cobalt. It holds interests in various properties in North and South America, Indonesia and the Democratic Republic of the Congo.
FCX had disappointing earnings in its report, which initially was met with selling, but this has since been overshadowed by the Fed’s reiteration of its free-money policy.
The overall market has shown resiliency, to say the least. The S&P 500 has not had a down day of more than half a percent so far this year, and has yet to experience a pullback of even 1%.
For FCX, this is the best start to the trading year since 1987. (Yikes!) FCX has recently shown a little weakness, stalling out at the $46 level.
Given the magnitude of the recent move and my expectation of a market pullback sometime in the next few months, I look for FCX to close around the $44 level by March options expiration.
Based on FCX’s current market price of $45.75 and using a target price of $44, a target date of March 16, 2012, and $1,000 of investment capital, you can capture some nice gains by buying the March 55 Put, selling a March call spread, buying a March put spread or using another options strategy that best fits your trading style and goals.
For the full details on this trade, visit TradingBlock.com, create a free Instant Login and try the TradeBuilder feature, where you’ll see several ways to trade this name. Best of all, you can see a potential profit-and-loss outline for each strategy.
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