MNV
Market News Video
MNV MNV 10 Stocks Crossing Above Their 200 Day Moving Average
MNV
MNV
MNV
MNV
MNV
MNV
MNV
Free Dividend Report - Top Ranked Stocks

Featured MNV Articles:

Notable Friday Option Activity: EVLO, FCX, CVGW
Friday, September 17, 3:26 PM ET, by Market News Video Staff

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume ...

How The Parts Add Up: FXZ Targets $66
Monday, September 20, 7:58 AM ET, by Market News Video Staff

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Monday Sector Laggards: Energy, Materials
Monday, September 20, 2:45 PM ET, by Market News Video Staff

In afternoon trading on Monday, Energy stocks are the worst performing sector, showing a 4.6% ...

Wednesday Sector Leaders: Energy, Materials
Wednesday, September 22, 3:09 PM ET, by Market News Video Staff

The best performing sector as of midday Wednesday is the Energy sector, higher by 4.2%. ...

November 12th Options Now Available For Freeport-McMoran Copper & Gold (FCX)
Thursday, September 30, 1:33 PM ET, by Market News Video Staff

Investors in Freeport-McMoran Copper & Gold (FCX) saw new options begin trading today, for the ...

December 17th Options Now Available For Freeport-McMoran Copper & Gold (FCX)

By Market News Video Staff, Friday, September 10, 10:52 AM ET
Play Video: The Importance of ETFs


If the video does not load after a few moments, Upgrade to the Latest Flash Player.
Email EnvelopeFree Email Alerts By Stock:
Get Dividend Alerts
Get SEC Filing Alerts

Investors in Freeport-McMoran Copper & Gold (NYSE:FCX) saw new options become available today, for the December 17th expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 98 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the FCX options chain for the new December 17th contracts and identified one put and one call contract of particular interest.

The put contract at the $35.00 strike price has a current bid of $2.95. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $35.00, but will also collect the premium, putting the cost basis of the shares at $32.05 (before broker commissions). To an investor already interested in purchasing shares of FCX, that could represent an attractive alternative to paying $35.49/share today.

Because the $35.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 8.43% return on the cash commitment, or 31.38% annualized — at Stock Options Channel we call this the YieldBoost.

Below is a chart showing the trailing twelve month trading history for Freeport-McMoran Copper & Gold, and highlighting in green where the $35.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $37.00 strike price has a current bid of $2.51. If an investor was to purchase shares of FCX stock at the current price level of $35.49/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $37.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 11.33% if the stock gets called away at the December 17th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if FCX shares really soar, which is why looking at the trailing twelve month trading history for Freeport-McMoran Copper & Gold, as well as studying the business fundamentals becomes important. Below is a chart showing FCX's trailing twelve month trading history, with the $37.00 strike highlighted in red:

Considering the fact that the $37.00 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 7.07% boost of extra return to the investor, or 26.33% annualized, which we refer to as the YieldBoost.

Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $35.49) to be 50%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.


This Article's Word Cloud:   Channel   Copper   December   Freeport   Gold   McMoran   Options   Stock   YieldBoost   also   available   call   chart   contract   contracts   covered   current   data   expiration   expire   fillColor   greeks   history   investor   left   month   odds   option   options   premium   price   represent   return   sell   shares   stock   strike   that   they   this   those   time   today   trading   trailing   twelve   which   will   worthless   would
MNV
MNV
About Us - Advertise - Contact Us - Embedding Videos - Licensing Videos - Partners - mRSS / RSS Feed - Terms of Use - Privacy Policy
MNV
Home  |  Analyst News  Dividend Report  ETFs  Insider Report  Large Caps  Market Movers  Week Ahead Report  Weekly Market Wrap
MNV
MNV MNV Chart Zero Stock Market Game Stock Market Definitions
MNV

December 17th Options Now Available For Freeport-McMoran Copper & Gold (FCX) | Market News Video | Copyright © 2008 - 2021, All Rights Reserved

Any ideas and opinions presented in all Market News Video clips are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.