I should have bought them today...I bet they are worth $3 in a few days the way FCX is tanking.
Unfortunately, FCX management was corrupt and rewarded themselves with a bailout purchase of oil and gas that they had a major stake.
Without that fiasco, they would easily have weathered this downtrend in copper and gold.
If it is true that the 2017 was artificially inflated due to TC's purchases, then there is great opportunity here over the next few weeks to make some decent, fairly safe cash. Buy the 2017 at 88% to 90% of par and sell them this quarter at 102% of par when TC starts buying again.
You just know they will do that, since it is about their only option now.
If I am going to try to hold puts or calls close to the money through expiration, I usually have a diagonal going. This protects me from adverse news over the weekend, because the longer dated option protects my expiring position.
Those two bonds are massively different.
The 2017 is secured by pretty much all of TC's assets
The 2018 is like a credit card debt
The yield is misleading also. While it is true that both bonds now pay a similar current yield (10.57 vs 11.66), the 2018 pays a massive return at par call because it is trading so far below par.
I like the 2017 better now as I believe TC's assets do have value, and you get paid 10.57% to wait on either a metal price recovery or you get to own a stake in a reorganized new TC with little debt.
If they run the business for 20 years without making any significant profit, then yeah, they are crazy.
2.) I have violated that before, but it was back pre-split on Apple when it was $400. I was 30% of my account in a option spread that made me a small fortune
3) Hate weeklies. I have considered selling them though.
4) Definitely. The only way to make money.
There were a few trades that did go through near 50 cents but the significant ask was around 73% of par for the 2019...still very bad though.
I always post what the ask is...as you say, the bid is somewhat meaningless. I could put a bid in for a buck.
He at least said don't buy TC until you see significant buys from management (which has not happened). This one piece of advice would have saved many people from significant losses.
If he doesn't understand bonds, that is fine. I wish I had not understood them either and had stayed away.
Yes, but I am in the 2019 bonds and am not too happy people are willing to take 50 cents on the dollar to sell their bonds. I really hope it is mostly desperation for cash since it seems a bit crazy to sell for that kind of loss when the payment is 25% of that per year. Even at $1.50 copper it would take a year, maybe year and a half for TC to go under.
Anyone new to TC I would direct to the 2017 bonds at 92% of par. You get paid 11% and will own the company.
If you can't throw $1500 away without batting an eye, get out of options.
I don't every trade weeklies. I went for the Sept $560 puts at the market open and made $12,000. I didn't know I would make that in one day, but was quite confident I would be able to sell them for a profit over the next two months.
I am not trying to smoke you, but I was trying to copy you today.
I bought ten Amazon Sept expiration $560 puts near the market open for $24 and sold them late in the day for $36. I know you hate puts, but it was the fastest $12,000 I have made.
I can't naked short stock in my IRA, but can write covered calls, sell cash secured puts, buy puts and calls, and do spreads.
I rolled the profits from Amazon puts into Sept $115 puts on Netflix at $8.90 each. Currently hold 14 puts.
My goal is to sell those when Netflix drops to $105.
Maybe this will end up saving TC.
No more high salaries. Cut those jobs. Get rid of investor relations..they don't do anything anyway.
I would like to see MM cost for copper at $0 a pound with gold byproduct at $1100 gold. Fire everyone you can afford to fire until you get to this level.
Gold was back up to near $1100, yet $2.5 million bonds traded for 30% yield. That is not a microscopic book.
The sky sometimes does in fact fall.
Guys, this is about as ugly as it gets.
How is TC going to refinance if the current bonds are selling for 30% yield to maturity.
$0.55 is a gift. Get out while you can. Buy the secured bonds if you want to own this thing after bankruptcy.
13% yield to maturity on the secured bond!
If I didn't have funds tied up in other stocks, I would be all over this.
Secured, so you get the whole mine, minus Royal's cut.
I'm screwed? What about common stockholders?
At least I will get $7,500 a year until TC declares bankruptcy sometime in 2017 (if they have to declare bankruptcy at all)