Use Covered Calls to Generate 15% Annualized Yield on Freeport-McMoRan Stock
FCX•FCX shareholders can boost annualized income to 15% by writing monthly covered calls at a $48 strike and collecting roughly $0.56 per $45 share. This premium strategy eclipses FCX’s 0.63% dividend yield while capping upside above the strike price.
1. Covered-Call Strategy Details
Freeport-McMoRan shareholders can write one-month at-the-money or slightly out-of-the-money call options to generate monthly premiums. For example, selling a $48 strike call on a $45 underlying share can net around $0.56 per share, equating to roughly 1.25% monthly income.
2. Yield Comparison and Considerations
This option premium strategy delivers about 15% annualized income versus FCX’s 0.63% dividend yield, boosting cash flow but capping share upside at the strike price. Investors should consider potential assignment risk, opportunity cost if shares rally, and the impact of volatility on option prices.
