BHP has had a fantastic run in the last month. We picked the bottom of BHP back in our commentary in June (http://www.finnewsnetwork.com.au/BrokerCommentry/926/My-options-strategy-for-BHP
). At that time I also explained a strategy to profit from this rally using options. Now that BHP has rallied to the top of the range and beyond, it is starting to look overbought. With a quarterly production report due, it could possibly extend up towards $40 as it sucks in the last of the “fear of missing out” crowd. BHP was a buy in the $35's, not up near $39. What I plan on doing is waiting to see a reversal in BHP up here and then we can open up a bearish strategy. For those investors who hold BHP shares and are not willing to sell, a covered call strategy in the next few days could profit from a short term pullback in the stock. So up at these levels, any day now, we will have an opportunity to trade the downside in BHP. Keep an eye out for any exuberance followed by some profit taking as a sign to go short.