Option trade: Southern Copper (PCU) covered calls
While the market’s short-term uptrend remains intact, a pullback or consolidation of some sort seems increasingly likely – especially as the major indices approach what are likely to be significant upside resistance levels. As a result, my only new position this week is a covered call:
Southern Copper (PCU: 0.00 N/A, yld: N/A%) – I sold some September 20-strike covered calls against my long position in PCU as it approached its January highs at the $19 level:
PCU remains in a short- and intermediate-term uptrend from its November lows. Near-term upside resistance might be expected at the ~$20, $22.5, and $25 levels. By selling the September calls I added some cash to my account, reduced my cost basis in the stock to a little over $10 per share, and left time to collect a couple more dividend payments before the stock is potentially called away.
