Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) opened at $57.52. So far today the stock has hit a low of $57.20 and a high of $58.90. As of 11:10 this morning, FCX is trading at 57.50, down 0.44 (0.8%).After hitting a one year high of 72.20 in April, the stock fell to a one year low of 43.10 just two months later. The stock has since calmed slightly, trading mostly in the 50-60 range over the past nine months. The company has recently been clearing the path for its upcoming shareholder approval vote to acquire Phelps Dodge (NYSE: PD). Gold and copper futures are both looking up this morning, giving FCX a lift earlier this morning, but market pressures at 12:30 dipped FCX into the red. The technical indicators for FCX have been bullish and steady, while S&P gives the stock a 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $50 range. FCX hasn't been below 50 for more than a day or two since June and has been in a solid trading range between 50 and 62 for the past 8 months. This trade could be risky if the copper or gold prices dip or if the PD situation changes dramatically, but even if that happens, FCX could be protected by its support around 50.
Brent Archer is an options analyst and writer at Investors Observer. (Free Subscription)
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.
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